It’s been hard to overlook Walmart’s (WMT Quick QuoteWMT - Free Report)  steady growth, while Target’s (TGT Quick QuoteTGT - Free Report)  cheaper valuation may still compel investors as a potential buy-the-dip target.

To that point, ahead of their Q3 results this week, Walmart stock is up a very respectable +14% in 2025, with Target shares down a grizzly 30%.

Seeing as past performance is not always indicative of future success, this certainly makes it a worthy topic of which retail stock may be the better investment as their Q3 reports approach.  

Target & Walmart’s Q3 Expectations

Set to report on Wednesday, November 19, Target’s Q3 sales are thought to have dipped 1% to $25.36 billion. On the bottom line, Target’s Q3 EPS is expected to be down 5% to $1.76. Notably, Target has missed the Zacks EPS Consensus in three of its last four quarterly reports with an average EPS surprise of -8.44%.

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As for Walmart, which reports on Thursday, November 20, Q3 sales are expected to be up over 4% to $177.14 billion. Even better, Walmart’s Q3 EPS is slated to rise 5% year over year to $0.61. Walmart has exceeded earnings expectations in three of its last four quarterly reports, with an average surprise of 2.79% despite most recently missing Q2 EPS estimates by nearly 7%.  

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Walmart’s Success & Target’s Woes

Summarizing their contrasting stock performances, Walmart has used e-commerce to leverage its massive global scale and grocery dominance while expanding into higher-margin businesses such as advertising, memberships, marketplace services, and vertical integration in food supply chains.  

In the last five years, WMT has stellar gains of over +100% with Walmart now bringing in more than $100 billion in digital sales annually.

Meanwhile, TGT is down over 45% during this period as Target has struggled with weaker sales growth, narrower margins, and less resilience to consumer spending shifts after previously being somewhat of a Wall Street darling as it relates to retail stocks.

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TGT & WMT Valuation Comparison

Surely attracting investor interest is that Target stock is trading at a steep discount to the benchmark S&P 500's 25X forward earnings multiple and the broader Zacks Retail and Wholesale sectors' 27X. It’s also noteworthy that TGT is trading at a 20% discount to its decade-long median of 15X forward earnings.

Walmart, on the other hand, trades at 39X forward earnings, although its EPS growth has been justifiable of a premium.

In terms of price to forward sales, TGT and WMT both trade at the often preferred level of less than 2X.

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Dividend Comparison & Final Thoughts

As dividend kings that have increased their payouts for at least 50 consecutive years, Walmart and Target are both making the argument for being viable long-term investments at their current levels.

That said, their Q3 reports will be critical to gauging if Walmart stock still has more upside or if Target’s is due for a rebound, with WMT and TGT both landing a Zacks Rank #3 (Hold) at the moment.  

Of course, Walmart’s steady expansion may make it a better long-term choice in terms of stock appreciation. Although a sharper turnaround in Target’s operational efficiency has been much needed, its reliable 5.07% annual dividend yield could still be more attractive regarding total return potential going forward compared to Walmart’s 0.92%.