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Target and 3 Other Retail Stocks to Buy Today

Sejuti Banerjea

Target TGT reported a solid quarter and raised guidance. Its year on year revenue increase of 3.6% to $18.42 billion was in line with the Zacks Consensus Estimate. However, the 22% increase in earnings to $1.82 was ahead of our expectations by 13%. Same store sales grew 3.4%.

Results benefited from perfecting the omni-channel model, as well as same day fulfilment (Order Pick Up, Drive Up and Shipt).

To top it all, it raised its full-year earnings guidance from $5.75-$6.05 per share to $5.90-$6.20 per share.

So, traditional retail is alive and well.

And as a corollary, consumer confidence is holding up, buoyed by historical highs in employment levels, ignoring the negative rhetoric around inverting yield curves and recessions.

The Fed minutes also showed that the recent rate cut was a one-off thing and unlikely to develop into a trend of more aggressive easing. So while the President continues to call for a 1% cut, it’s significant that he’s back-tracking on promises to evaluate a tax cut.

Overall, it just doesn’t look like the economy is stalling. The only uncertainty in all this is the trade deal and since the president has signaled he isn’t in a hurry and its highly likely that Xi may want to deal with the next president, we may as well stop fretting about it.

So with that out of the way, let’s jump straight to the stock picks. This lot has Zacks #1 ranks, meaning they have strong buy ratings. They are in attractive industries within the Retail-wholesale sector and also boast a VGM (value, growth, momentum) Score of A, meaning that they are suitable for all investors, irrespective of their risk appetite. Further details below-

PC Connection, Inc. CNXN

PC Connection is a direct marketer of brand-name personal computers and related peripherals, software and networking products to business, education, government and consumer end users located primarily in the United States.

Zacks Rank #1

VGM Score A

Industry: Retail - Computer Hardware top 1%

Last 4-quarter surprise 15.1%, last quarter 27.1%

In the last 30 days, earnings estimates increased a penny for the current quarter and 9.2% for the current year

Ingles Markets, Inc. IMKTA

Ingles Markets is a leading supermarket chain with operations in the southeastern United States. Ingles' strategy is to locate its supermarkets primarily in suburban areas, small towns and rural communities, where management believes the market may be underserved by existing supermarkets.

Zacks Rank #1

VGM Score A

Industry: Retail – Supermarkets top 21%

Quarterly earnings grew 56.8% in the June quarter

In the last 30 days, the current-year earnings estimate jumped 14.7%

Group 1 Automotive, Inc. GPI

Group 1 Automotive is a Fortune 500 automotive retailer. The company leverages management experience and emphasizes geographic and brand diversity, interrelated revenue streams, operational efficiencies and the prudent deployment of capital. Through its dealerships, the company sells new and used cars and light trucks; arranges related vehicle financing; sells service contracts; provides maintenance and repair services; and sells vehicle parts.

Zacks Rank #1

VGM Score A

Industry: Automotive - Retail and Whole Sales, top 1%

Last 4-quarter surprise 3.7%, last quarter 3.3%

In the last 30 days, the current-quarter earnings estimate grew 1.8% and current-year earnings estimate grew 2.1%

You can also see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

 

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Group 1 Automotive, Inc. (GPI) : Free Stock Analysis Report
 
Target Corporation (TGT) : Free Stock Analysis Report
 
Ingles Markets, Incorporated (IMKTA) : Free Stock Analysis Report
 
PC Connection, Inc. (CNXN) : Free Stock Analysis Report
 
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