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Target (TGT - Free Report) 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 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 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 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%
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.
Image: Bigstock
Target and 3 Other Retail Stocks to Buy Today
Target (TGT - Free Report) 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 - Free Report)
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 - Free Report)
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 - Free Report)
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
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.
See 7 breakthrough stocks now>>