Retail

Holiday Shopping Has Exploded Early: 4 Large-Cap Retail Winners to Buy Now

Costco remains one of the few conventional retailers where metrics like store traffic, market share gains and a validated model could bode well for international growth and expansion. The company is largely unharmed by e-commerce, and it continues to add stores in strategically mapped out locations.

Wall Street loves the company’s pricing authority on key items and the leading merchandising offerings, and the relatively new Costco co-branded card with Visa is a real positive. Add in the company’s growing online presence and the future looks bright.

Costco Wholesale stock investors receive a 0.60% dividend. The BofA Securities price target is $550. The consensus target is $508.02, but the shares closed trading at $526.72 on Tuesday.

Target

This remains a solid and safe retail total return play. Target Corp. (NYSE: TGT) is one of the largest discount retailers in the United States, operating roughly 1,900 Target stores across the country. The company sells merchandise in its Signature Categories Style, Baby, Kids and Wellness, as well as other products in both physical Target stores and online at Target.com.

While the company has shot itself in the proverbial foot more than once over the past five years, for a variety of reasons, it remains a prime destination for shoppers and should be poised for a big holiday season. In addition, for over three years, Target has poured tons of money into its e-commerce offerings, overhauling its stores and refreshing its inventory to compete better against Amazon.

Shareholders receive a 1.35% dividend. The $295 BofA Securities price objective compares to the $283.45 consensus target. Target stock closed on Tuesday at $266.39.

Walmart

The giant retailer posted solid results this week but has traded sideways this year and offers a compelling entry point. Walmart Inc. (NYSE: WMT) is the world’s largest retailer, operating retail stores under the formats of Walmart Stores, Supercenters, Neighborhood Markets and Sam’s Club locations in the United States, as well as a growing e-commerce business. Internationally Walmart also operates locations in several countries, including Argentina, Brazil, Canada, China, Japan, Mexico and the United Kingdom.

Each week, nearly 260 million customers and members visit the company’s 11,535 stores under 72 banners in 28 countries and e-commerce websites in 11 countries. With fiscal 2020 revenue of over $550 billion, Walmart employs approximately 2.2 million associates worldwide.

Shareholders receive a 1.54% dividend. BofA Securities has set a $175 price target. The consensus target for Walmart stock is $169.80, and shares were last seen on Tuesday at $143.17.


The key to all of these top companies is that they offer what most consumers are looking for: the lowest prices. In a very competitive world, they continue to be a formidable challenge for smaller companies and should once again dominate the holiday shopping season.

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