Stephanie Link
Chief Investment Strategist & Portfolio Manager at Hightower, Contributor to CNBC
Target is a long-term buy as channel checks show noticeably better foot traffic and products worth buying. It trades at 15x earnings with a 3.5% yield, while sentiment stays skeptical, with 14 sell-side buys against 27 holds or sells; an Oppenheimer analyst apparently agrees with the bullish view. x.comÂ
Target looks appealing after fixing its inventory problems and returning to sales growth, while remaining far cheaper than its rival. It spent about four years on the inventory repair and cut prices on more than 10,000 products. x.comÂ
Amazon's weak retail growth has shaken the earlier buy case. Online-store sales rose just 2% year over year, and the retail numbers look so poor that it is no longer clear at what price the shares are a buy. x.com x.com x.comÂ
Target's EBITDA multiple should not keep expanding when the backdrop is hurting its business on net while comparable companies retrench. The multiple is nearing Amazon's, yet almost no one would plausibly own Target over Amazon for any real length of time. Per @valuedrift, low multiples protect and high multiples leave a stock vulnerable. x.comÂ
Target filled its earnings gap and printed a doji candle, which usually signals a reversal, so it should start moving back up. Earnings were great and sentiment around the new CEO is positive. x.comÂ
Target's real value lies in its real estate, much like McDonald's, so the bankruptcy thesis from @porterstansb misses it. Plenty of capital can be unlocked from its roughly 1,550 owned stores through sale-leasebacks, which the balance sheet reveals. x.comÂ
Starbucks is a best-in-class operator in a higher-for-longer environment that will squeeze consumers and send them to the winners. April CPI rose 3.8%, hotter than expected, costing the Fed its best argument for a cut. CEO Brian Niccol delivered the first earnings beat in five quarters and a second straight quarter of traffic growth, the hardest thing to pull off when wallets are tight. x.com x.comÂ
Dollar General may be in a turnaround the market is missing, with improving traffic, expanding margins and a stronger balance sheet. Similar signs showed up in Advance Auto Parts when Wall Street had largely given up on it, before its shares roughly doubled within 30 days. x.comÂ
Kroger keeps quietly rewarding shareholders with dependable, defensive results, because everybody has to eat. In Q2 FY26 sales rose just 2% to $34.6B, but operating profit grew 12.5% to $971M as Kroger trimmed D&A and held costs flat. Net earnings rose 5%, while EPS jumped 15% to $1.05 because aggressive buybacks shrank the share count from 662M to 606M. x.comÂ