Target Corporation (TGT), Sears Holdings Corporation (SHLD): Poor Season for US Retail

Valuations and Metrics

The price action in recent weeks has had consequences for these companies’ valuations, so it may be useful to give a quick rundown of what they are trading at currently. Worryingly, the only company mentioned here that is currently trading a positive P/E ratio is Target Corporation (NYSE:TGT), which currently trades at 15.42 times trailing earnings. As such, it may be more useful to take a look at price to sales. Sears Holdings Corporation (NASDAQ:SHLD) currently has the lowest multiple, at 0.16, followed by J.C. Penney Company, Inc. (NYSE:JCP)’s 0.34 and Target’s 0.60. Since Target Corporation (NYSE:TGT) is the only one of these actually making money at the moment, it might be the best bet for cautious investors.

The Bottom Line

After months of strong performance from some US retailers, and some fairly encouraging macro numbers, things seem to have taken a turn for the worse recently. A number of large US retailers have announced disappointing results, in part due to the poor spring weather and the recent payroll tax hike. While US retail is certainly not out yet, one may be cautioned by this string of lower than expected earnings.

Daniel James has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Daniel is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article Poor Season for US Retail originally appeared on Fool.com and is written by Daniel James.

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