UBS’ Top Quant Stocks In AI, IT, Healthcare & Other Sectors: Top 33 Stocks In All Sectors

22. Target Corporation (NYSE:TGT)

Number of Hedge Fund Investors In Q2 2024: 52

Sector: Consumer Staples

Target Corporation (NYSE:TGT) is one of the biggest discount retailers in the US. It benefits from a wide retail presence courtesy of more than two thousand retail locations. These provide Target Corporation (NYSE:TGT) with the depth of market penetration and enable it to drive volumes which are key to sustaining margins in the consumer goods industry. Being a discount retailer helps it benefit from a sales uptick when inflation is rising and also when it’s dropping. Target Corporation (NYSE:TGT) is also using the reduced inflationary environment to drive volumes. For instance, its shares jumped by 10% in August following Q2 revenue and earnings beat. Target Corporation (NYSE:TGT)’s Q2 revenue of $24.45 billion and EPS of $2.57 both beat analyst estimates and the firm also raised full-year midpoint EPS guidance to $9.35 from an earlier $9.10.

Since it relies on discretionary spending to a large extent, here’s what Target Corporation (NYSE:TGT)’s management shared during the Q2 2024 earnings call:

“Within our assortment in Q2, we saw notable areas of strength in both discretionary and frequency categories. As Brian highlighted, discretionary trends have been improving for a full year now, and combined discretionary comps were down only slightly in Q2. This momentum was most evident in our apparel assortment, which delivered low single-digit comp growth driven by newness in combination with strong everyday value, both in-stores and online. Comps were led by a performance category in the low double-digits as guests loved our latest designs and unbeatable prices in our All in Motion brand. Women’s apparel saw growth in the low to mid-single-digits with particular strength in our young contemporary owned brand Wild Fable. And a recent relaunch of our intimate and sleepwear brand, Auden, has seen a strong guest reaction out of the gate, offering high quality and comfortable items at compelling price points, like $15 bras and $20 pajama sets.

These results demonstrate the broad-based improvements that we’re seeing in apparel, a trend we are eager to build on in the coming quarters and years.”