Target Corporation (TGT), Costco Wholesale Corporation (COST): Consider Buying This Stock on Weakness

Target has been attempting to steal market share from Wal-Mart Stores, Inc. (NYSE:WMT) in the grocery category with its PFresh brand, but Wal-Mart has already established such an enormous presence in groceries that it will be difficult for Target to see meaningful progress.

That said, with Costco’s recent run-up, it is now trading at 25 times earnings, whereas Target Corporation (NYSE:TGT) is trading at just 15 times earnings. And Target is a much smaller company than Wal-Mart Stores, Inc. (NYSE:WMT), which sports a similar P/E multiple to Target, leaving more growth potential for Target.

Conclusion
Despite intense competition and a weak consumer, Target Corporation (NYSE:TGT) has made strategic moves in order to boost its growth potential. If its Canadian expansion and CityTargets openings are successful, then Target is a great bargain here especially compared to its main competitors. Even if these initiatives under-perform, and/or if the stock market falters and drags the stock down, it’s likely to present a good opportunity to buy more shares at lower levels.

The article Consider Buying This Stock on Weakness originally appeared on Fool.com.

Dan Moskowitz has no position in any stocks mentioned. The Motley Fool recommends Costco Wholesale (NASDAQ:COST). The Motley Fool owns shares of Costco Wholesale. 

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