WMT

Interested in Walmart Inc.? Here are five stocks we like better. Retail earnings reveal a K-shaped consumer trend, with wealthier shoppers spending on home improvement while lower-income households cut back further. Home Depot beat estimates with 6% revenue growth and strong comparable sales, while Lowe's grew sales but cut its full-year outlook amid softer DIY demand. Five Below posted 23% sales growth and Walmart raised guidance despite slower growth, showing hidden strengths even as tariff-related pressures persist. Looking back on the latest earnings season for retail stocks, an unusual K-shaped pattern emerges: lower-income households appear to be struggling, with some value stores having a difficult time reconciling their low prices against increasingly costly inventory. At the same time, though, a handful of specialized stores, including homeowner and contractor supply chains, have had unexpected strong quarters in numerous respects. This data helps to support the growing narrative that different groups of consumers are experiencing the economy in vastly different ways, with those with more disposable cash tending to spend freely and those without being forced to tighten belts to even more extreme degrees. → NVIDIA’s Hugging Face Deal Raises a Bigger Question About Its AI Moat Now The situation means that some companies—like The Home Depot Inc. (NYSE: HD) and Lowe's Companies Inc. (NYSE: LOW)—have done better than others, including Walmart (NASDAQ: WMT) and Five Below Inc. (NASDAQ: FIVE), even while the latter have some hidden wins that suggest a more complicated consumer landscape than some may anticipate. Home Depot's Q2 2026 earnings of $4.92 per share came on the back of revenue of nearly $48 billion, which was up about 6% year over year (YOY). → Palo Alto Networks Is Expensive—But Its Growth Is Accelerating Both metrics were ahead of analyst predictions, fueled by comparable store sales growth of 1.7%, a notably high figure for the company. Home improvement projects seem to be fairly robust, particularly among higher-income homeowners with more discretionary income to spend. → Amazon’s Robot Push Raises a Bigger Question About Its Next Margin Lever The company enjoyed strong demand across many of its departments, supported by its new three-hour express delivery service—this service is also one that may appeal to consumers with more disposable income who are willing to spend extra for the convenience. To be sure, uncertainty about consumer sentiment in general, as well as concerns about housing affordability, may negatively impact some types of home improvement projects. Still, Wall Street analysts have rallied behind Home Depot stock, calling it a Moderate Buy overall and predicting about 18% in future upside. On a macro level, Lowe's would seem to benefit from many of the same factors driving Home Depot's growth. The company is also well-suited to providing for those big-ticket home improvement projects that some consumers are still prepared to spend large amounts of money on. This is evidenced by Lowe's sales growth of 8.3% YOY in the latest quarter, as well as strong free cash flow and pro sales growth that reflects strong contractor demand. The issue for Lowe's may be that its overall competitive position is weaker than Home Depot's. Management recently reduced its full-year outlook due to softer DIY demand. Comparable sales increased by just 0.2% YOY—while better than a decline, it's a much slower rate than Home Depot. In addition, the company decided not to leverage tariff refunds to offer strong summer promotions to the same degree as some of its competitors, and performance suffered as a result. Five Below faces challenges to its margins as a result of significant increases to fuel costs, and tariff benefits are disappearing fast. Still, the company has managed to post some crucial wins in key areas: profitability was still up, with merchandise-margin gains and fixed-cost leverage as two important contributing factors. Where Five Below really succeeded in Q2 2026, though, was in sales growth of 23% YOY, including 14% YOY improvement to comparable sales. This may suggest that consumers are still be willing to spend on discretionary items when the price point is compelling, even as economic pressures make them more selective about larger purchases. Five Below may have cracked the code to continuing to see robust traffic and transactions, even as economic pressures mount. Walmart, on the other hand, disappointed investors with its latest earnings, even though it also raised its full-year guidance. The issue may be that the company posted notably slow sales growth compared to other recent quarters. There also may be a concern that the company's results are artificially benefiting from near-term tariff refunds that are not going to last. Still, Walmart's digital business appears to be thriving and building its margins. Advertising remains a high-growth corner of the company's ecosystem, but it is also supported by growth in membership income, e-commerce, and more. This may be why, despite shares falling by about 2.7% year to date (YTD), analysts remain very bullish on WMT stock overall and see the stock gaining 24%. The article "Retail Earnings Just Exposed a Bigger Divide in the U.S. Consumer Economy" was originally published by MarketBeat. View MarketBeat's top stocks for September 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved a step-change quarter with 55% revenue growth, driven by the successful ramp of new branded items at Walmart and Target alongside the Bay Shore acquisition contribution. Demonstrated significant operating leverage as bottom-line metrics grew faster than revenue, with operating expenses declining 160 basis points as a percentage of sales. Sequentially improved gross margins to 24.0% as Q1 product launches transitioned from front-loaded investment phases into steady-state production efficiencies. Capitalized on the 'grandmacore' consumer trend and the shift from restaurants to ready-to-eat grocery meals, which McKinsey identifies as a top industry theme. Transformed the corporate M&A profile following a successful equity offering, shifting from balance-sheet-constrained deals to pursuing larger, accretive acquisitions from a position of strength. Optimized the three-facility network by sharing equipment and personnel across sites, while nearly doubling storage capacity at the East Rutherford facility to reduce external logistics costs. Reimagined the supplier base through vendor diversification, successfully avoiding a 12% increase in packaging material costs despite inflationary pressures. Reiterated a mid-to-high 20% corporate gross margin target, contingent on increasing the sales mix of 'chicken bottoms' The company is increasing its use of chicken bottoms, which accounted for three of the four items in the Kroger launch and over 60% of new placements in Q2.. Anticipates continued sequential margin improvement in Q3 as Bay Shore facility margins move toward the corporate average and new automation technologies scale. Prioritizing 'net plus two' SKU expansion across top 10 accounts, supported by a repeatable marketing playbook involving retail media and micro-influencer activation. Actively evaluating larger M&A targets (exceeding $25 million in revenue) that offer incremental capabilities, capacity, or new customer access rather than just scale. Maintaining a long-term strategic line of sight to $1 billion in revenue, supported by a balance sheet with $138.6 million in cash and virtually no debt. Announced a milestone entry into banner Kroger starting in the Louisville division, marking the achievement of a goal to partner with the top three U.S. food retailers. Confirmed a second-half multi-vendor mailer (MVM) with Costco across all eight regions, which is forecasted to be larger in volume than the prior year's promotion. Invested over $1 million more in high-ROI trade promotions compared to the prior year, intentionally shifting $0.5 million from marketing to trade to drive higher velocity. Appointed the company's first Chief People Officer to lead high-performing organization building and supercharge operational leadership capabilities. Management plans a 'slow and grow' approach, starting with over 100 stores (roughly 10% of the banner) using high-velocity meatball and chicken items. The relationship was secured through a combination of long-term executive relationships and targeted marketing in the Cincinnati area. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management explicitly traded approximately 100 basis points of gross margin to fund higher-effectiveness trade promotions that drive retail velocity. The strategy prioritizes building a $1 billion business through long-term volume gains over maximizing immediate 91-day margin prints. The company is moving away from smaller $25 million revenue acquisitions due to the high integration effort required relative to the impact. The new cash position has opened doors to 'grown-up table' conversations with larger targets that previously viewed the company as too small. While 60% of new placements use chicken bottoms, the high velocity of 'top' items (breasts) makes shifting the total percentage mix challenging. Management is now requiring customers to take 'bottom' items (strips, meatballs) as a condition for receiving high-demand 'top' items to protect margins. Current facilities can support roughly double the previous year's business volume through increased shifts and automation rather than physical expansion. New Proseal automation has already increased throughput significantly, completing a full day's manual work by noon.

The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Walmart (NASDAQ:WMT) and the rest of the large-format grocery & general merchandise retailer stocks fared in Q2. Big-box retailers operate large stores that sell groceries and general merchandise at highly competitive prices. Because of their scale and resulting purchasing power, these big-box retailers–with annual sales in the tens to hundreds of billions of dollars–are able to get attractive volume discounts and sell at often the lowest prices. While e-commerce is a threat, these retailers have been able to weather the storm by either providing a unique in-store shopping experience or by reinvesting their hefty profits into omnichannel investments. The 4 large-format grocery & general merchandise retailer stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 2.1% while next quarter’s revenue guidance was 1.4% below. While some large-format grocery & general merchandise retailer stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.3% since the latest earnings results. Known for its large-format Supercenters, Walmart (NASDAQ:WMT) is a retail pioneer that serves a budget-conscious consumer who is looking for a wide range of products under one roof. Walmart reported revenues of $187.9 billion, up 5.9% year on year. This print exceeded analysts’ expectations by 0.6%. Despite the top-line beat, it was still a slower quarter for the company with EPS guidance for next quarter missing analysts’ expectations significantly and full-year EPS guidance missing analysts’ expectations. Walmart delivered the weakest performance against analyst estimates in the group. The market seems disappointed with the results as the stock is down 7.3% since reporting and currently trades at $105.98. Read our full report on Walmart here, it’s free. With a higher focus on style and aesthetics compared to other large general merchandise retailers, Target (NYSE:TGT) serves the suburban consumer who is looking for a wide range of products under one roof. Target reported revenues of $26.54 billion, up 5.3% year on year, outperforming analysts’ expectations by 1.5%. The business had an exceptional quarter with a beat of analysts’ EPS estimates and full-year EPS guidance exceeding analysts’ expectations. The market seems happy with the results as the stock is up 7.1% since reporting. It currently trades at $163.34. Is now the time to buy Target? Access our full analysis of the earnings results here, it’s free. Designed to be a one-stop shop for the suburban consumer, Costco (NASDAQ:COST) is a membership-only retail chain that sells groceries, apparel, toys, and household items, often in bulk quantities. Costco reported revenues of $70.53 billion, up 11.6% year on year, exceeding analysts’ expectations by 1.5%. It may have had the worst quarter among its peers, but its results were still good as it also locked in a solid beat of analysts’ gross margin estimates. As expected, the stock is down 6.7% since the results and currently trades at $928.71. Read our full analysis of Costco’s results here. Appealing to the budget-conscious individual shopping for a household, BJ’s Wholesale Club (NYSE:BJ) is a membership-only retail chain that sells groceries, appliances, electronics, and household items, often in bulk quantities. BJ's reported revenues of $6.23 billion, up 15.7% year on year. This result beat analysts’ expectations by 4.7%. Overall, it was an exceptional quarter as it also produced a solid beat of analysts’ EBITDA estimates and full-year EPS guidance beating analysts’ expectations. BJ's achieved the biggest analyst estimate beat and fastest revenue growth among its peers. The stock is up 1.8% since reporting and currently trades at $92.96. Read our full, actionable report on BJ's here, it’s free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

Interested in Mama's Creations, Inc.? Here are five stocks we like better. Strong financial growth: Fiscal Q2 revenue rose 55% to $54.6 million, while net income more than doubled to $2.6 million and adjusted EBITDA increased 68.9% to $5.5 million. Adjusted EBITDA margin expanded to 10.1% from 9.3%. Retail expansion is accelerating: Mama’s launched or secured new placements with Kroger, Costco, Sam’s Club, Albertsons and BJ’s, while its products reached more than 2,300 Walmart stores. Chicken-bottom products accounted for more than 60% of new second-quarter placements. Capacity and acquisition flexibility improved: Bay Shore still has significant available capacity, East Rutherford storage expansion is expected to reduce logistics costs, and the company ended the period with $138.6 million in cash and just $4.8 million in debt to support potential strategic acquisitions. MAMA Says a Fresh High Could Come Before Mid-Year Mama's Creations (NASDAQ:MAMA) reported fiscal second-quarter revenue growth of 55% and said expanded retail distribution, contributions from the Bay Shore acquisition and new product launches helped drive operating leverage and higher profitability. For the quarter, revenue increased to $54.6 million from $35.2 million a year earlier. Net income more than doubled to $2.6 million, or $0.06 per diluted share, from $1.3 million, or $0.03 per diluted share. Adjusted EBITDA, a non-GAAP measure, rose 68.9% to $5.5 million, while adjusted EBITDA margin expanded to 10.1% from 9.3% in the prior-year quarter. → Boarding Call: EHang Secures First-Mover Altitude Chairman and Chief Executive Officer Adam O'Michaels said the results reflected the company's strategy of investing in product launches before realizing greater scale and leverage. “Every single bottom-line metric grew faster than revenue,” O'Michaels said, citing income from operations, adjusted EBITDA and net income. Gross profit rose 49.1% to $13.1 million. Gross margin was 24.0%, compared with 24.9% in the year-ago period but up from 23.6% in the fiscal first quarter. Chief Financial Officer Anthony Gruber said the sequential improvement reflected new packaging technologies and protein form factors moving toward steady-state production following first-quarter launches. → Medtronic’s Stars Are Aligning for a Price Recovery Management said it continues to target corporate gross margins in the mid- to high-20% range. O'Michaels said progress toward that goal will depend in part on increasing sales of chicken “bottom” products, which allow the company to use more of its chicken inputs and reduce trimming costs, as well as further improvement at the Bay Shore facility. Operating expenses rose in dollars to $10.1 million from $7.1 million, largely due to the Bay Shore acquisition, but declined as a percentage of revenue. Operating expenses represented 18.5% of revenue, down 160 basis points from 20.1% a year earlier. → Dutch Bros Sell-Off Creates a Growth Opportunity During the question-and-answer session, O'Michaels said the company intentionally shifted about $500,000 of marketing spending into trade promotions during the quarter because it was seeing stronger returns. He said Mama's spent more than $1 million more on trade activity than it did in the prior-year period. Mama's announced its first launch with Kroger, beginning next month in the retailer's Louisville division. The initial rollout will cover more than 100 stores and include four products, including three chicken-bottom stock-keeping units. O'Michaels said the company plans to begin in one division and expand over time if product performance supports additional distribution. The company also said it was approved for Costco's second-half multi-vendor mailer promotion across all eight U.S. regions. O'Michaels said the promotion is forecast to be larger than the prior-year program and is expected to run around the last two weeks of December or early January, although Costco rotations had already begun in several regions. At Sam's Club, Mama's recently launched a breaded panko chicken breast product in 300 clubs, O'Michaels said. The company also cited new launches or placements at Albertsons, BJ's and more than a dozen other customers. More than 60% of new placements launched during the second quarter used chicken-bottom products, according to management. Walmart remained a key growth driver. O'Michaels said Mama's products are now in more than 2,300 Walmart stores, above the approximately 2,000 stores initially discussed for the rollout. He said grilled chicken products were performing particularly well, while sausage and peppers and meatloaf were showing lower velocities than beef meatballs and cheese-stuffed chicken meatballs. The company said it is reviewing the assortment proactively and may replace slower-moving products with higher-velocity items. Management said the Bay Shore facility was instrumental in supporting recent Walmart and Sam's Club launches. O'Michaels said the site is improving toward gross-margin levels achieved at Mama's East Rutherford and Farmingdale operations as volume increases and fixed costs are absorbed over more production. The company said it still has available capacity at Bay Shore, which is not operating seven days a week or around the clock in all areas. O'Michaels said Mama's could “pretty much double” its business from the prior year using its existing facilities, though he emphasized that product mix and automation will affect capacity utilization. Mama's also completed an expansion at its East Rutherford, New Jersey, site that nearly doubled frozen and refrigerated storage capacity. The company expects the expansion to lower outside storage costs and improve logistics flexibility. It has added two Proseal machines to increase production efficiency, according to O'Michaels. On procurement, management said supplier diversification avoided a potential 12% materials increase for packaging. The company also added three beef suppliers and said changes to supply planning are supporting additional safety-stock levels for its top products. Cash and cash equivalents totaled $138.6 million as of July 31, up from $20 million at the end of fiscal 2026. Gruber said the increase was primarily driven by $108.6 million of net proceeds from a July common-stock offering and $11.9 million of operating cash flow generated during the first six months of the fiscal year. Total debt stood at $4.8 million. O'Michaels said the larger cash balance and low debt give Mama's greater flexibility to pursue acquisitions that add capacity, capabilities or customer access. He said the company is less interested in acquisitions of approximately $25 million in revenue than it may have been previously, given the work required to integrate a business, but stressed that management will remain disciplined on valuation and strategic fit. The company also said it sees seafood as a potential longer-term opportunity, either through internal capabilities or acquisitions, though O'Michaels said Mama's has substantial room to expand its existing beef, chicken and vegetable offerings. Mama's Creations, Inc engages in the marketing, manufacturing, and distribution of beef meatballs with sauce, turkey meatballs with sauce, beef meat loaf, sausage and peppers, chicken parmesan, and other similar meats and sauces. Its products include beef meatballs, turkey meatballs, stuffed meatballs, lasagna roll ups, retail ready meals, bulk deli, single-size pasta bowls, and packaged refrigerated products. Its brands include MamaMancini's, Creative Salads, and The Olive Branch. The company was founded by Daniel Dougherty on July 22, 2009 and is headquartered in East Rutherford, NJ. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Mama's Creations Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for September 2026.

Mama's Creations, Inc. MAMA is likely to witness top- and bottom-line growth when it reports second-quarter fiscal 2027 earnings on Sept. 3. The Zacks Consensus Estimate for revenues is pegged at $53.1 million, indicating an increase of 50.9% from the year-ago reported number. The consensus mark for earnings has remained unchanged over the past 30 days at 5 cents a share, which suggests a jump of 66.7% from the figure reported in the year-ago period. MAMA has a trailing four-quarter surprise of 129.2%, on average. Mama's Creations, Inc. price-consensus-eps-surprise-chart | Mama's Creations, Inc. Quote Mama’s Creations’ performance is likely to have benefited from the ramp-up of products launched late in the first quarter. More than a dozen new items were introduced across major retailers, including Walmart, Target and Food Lion, with these placements expected to ramp up through the balance of fiscal 2027. Walmart’s new chicken items were already witnessing improving weekly velocities and had reached more than 2,000 stores by early June.Broader retail distribution may also have supported performance. The company added products across Albertsons divisions, Weis and Fresh Market, while Costco’s everyday-item status in the Northeast continued to provide steady volumes. The addition of branded beef meatballs as an everyday item in Costco’s San Diego region may have given another incremental volume opportunity.The Bay Shore acquisition is likely to have remained another growth contributor, supported by cross-selling opportunities across legacy and Crown 1 customers. Improving utilization at the Bay Shore facility, centralized procurement and logistics, and the completed ERP integration across all three manufacturing facilities may also have aided productivity and operating leverage.On the downside, inflation-related input pressures and continued trade support behind new product launches could have weighed on margins. However, efficiencies from moving recently launched items toward steadier production levels may have partly mitigated these pressures. Our proven model doesn’t conclusively predict an earnings beat for Mama's Creations this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. Mama's Creations currently carries a Zacks Rank #4 (Sell) and has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. Here are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.The Chefs' Warehouse, Inc. CHEF currently has an Earnings ESP of +3.02% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for its upcoming quarter’s revenues is pegged at $1.13 billion, indicating a 10.4% rise from the figure reported in the prior-year quarter. The consensus estimate for Chefs' Warehouse’s earnings is pegged at 61 cents per share, implying 22% growth from the year-ago quarter. CHEF delivered a trailing four-quarter earnings surprise of 30.4%, on average.Mondelez International, Inc. MDLZ currently has an Earnings ESP of +0.39% and a Zacks Rank of 3. The consensus estimate for the quarterly revenues is pinned at $9.97 billion, which suggests 2.4% growth from the figure reported in the prior-year quarter. The Zacks Consensus Estimate for Mondelez’s upcoming quarter’s EPS is pegged at 72 cents, which declined 1.4% from the year-ago period figure. MDLZ delivered a trailing four-quarter earnings surprise of 5.8%, on average.Altria Group, Inc. MO currently has an Earnings ESP of +0.37% and a Zacks Rank #3. The consensus estimate for quarterly revenues is pegged at $5.33 billion, which indicates an increase of 1.5% from the figure reported in the prior-year quarter.The Zacks Consensus Estimate for Altria’s upcoming quarter’s earnings per share is pegged at $1.50, which calls for 3.5% growth from the figure reported in the prior-year quarter. MO delivered a trailing four-quarter earnings surprise of 1.3%, on average. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Mama's Creations, Inc. (MAMA) : Free Stock Analysis Report Altria Group, Inc. (MO) : Free Stock Analysis Report Mondelez International, Inc. (MDLZ) : Free Stock Analysis Report The Chefs' Warehouse, Inc. (CHEF) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Target (NYSE: TGT) has an incredible dividend history, with 50 consecutive annual dividend increases. That makes it a Dividend King, an elite group that not every company can join. Target has a strong business model that is executed well in both good times and bad. The company is currently working its way out of a bad time, but after gaining 66% in 2026, as of this writing, is there still any value left in the shares? Target is a mass-market retailer, but it tends to focus on offering a higher-quality shopping experience. That generally means nicer stores, a more pleasant shopping environment, and higher prices than those of its main peer, Walmart (NASDAQ: WMT), which has an everyday low-price focus. As elevated inflation levels pressured consumers' budgets, Target was out of step with the market. Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » As consumers shifted to lower cost competitors, its revenues and earnings fell. Investors dumped the stock with such vigor that it seemed to suggest a belief that Target would never be able to adjust. At one point, the stock was down nearly 70% from its 2021 high. But a company doesn't join the ranks of Dividend Kings by accident, and the retailer got to work on a turnaround plan. That plan began to bear fruit in 2026, leading to renewed market interest in the stock. In the first quarter, sales rose 6.7%, with same-store sales up 4.4%. The second quarter proved that it wasn't a fluke, with sales up 5.3% and same-store sales rising by 3.8%. That 66% price advance is a very big move in a very short period of time. In fact, it has pushed the company's price-to-sales and price-to-earnings ratios above their five-year averages. That suggests the big value opportunity here is gone, but you have to keep in mind that the stock was deeply depressed due to weak financial performance. So the five-year averages could be skewed low. While it is completely fair to say that Target doesn't offer the same value as it did at the start of 2026, Walmart's P/S and P/E ratios are 1.1x and 38x, respectively. Target's P/S and P/E ratios are roughly 0.7x and 17x, respectively. Moreover, the high end of those metrics for Target was around 1.1x and 23x, respectively, in the early 2020s. Given that the stock is still nearly 40% below its 2021 high, there could be more room to recover. Still, deep value investors should probably look elsewhere. Investors have already priced much of the recovery news into the stock price, as reflected in valuation metrics relative to their five-year averages. In fact, if you bought at the low, you may want to consider locking in some profits. Further gains are likely to require Target to continue posting very strong numbers. If it falls short of that, a sell-off wouldn't be surprising. Before you buy stock in Target, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Target wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $440,710!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,335,252!* That performance is why people listen. With a track record of beating the S&P 500 by nearly 5x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 30, 2026. Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Target and Walmart. The Motley Fool has a disclosure policy. Target Is Up 66% This Year. Here's Whether the Dividend King Still Has Room to Run After Earnings. was originally published by The Motley Fool

Walmart Inc. (NASDAQ:WMT) disappointing sales and The Home Depot, Inc. (NYSE:HD) strength among budget-conscious do-it-yourselfers indicate middle-class consumers are growing more tight-fisted, Reuters reported, even as wealthier shoppers keep supporting luxury brands like Ralph Lauren. Walmart's fiscal second-quarter comparable sales grew 3.4% excluding the impact of pharmacy-related items, while Walmart, TJ Maxx owner TJX, and Home Depot all warned shoppers remain "selective" as U.S. retail sales in July posted their first monthly decline in nine months. Basket sizes shrank at Walmart and Target as shoppers continued visiting stores but spent less per trip. IG Group analyst Angeline Ong said, "Even Walmart, which has been supported by more affluent households trading down, isn't able to keep average spending growth rising." Walmart Inc. (NASDAQ:WMT)'s sales growth, while decelerating, is still positive and reflects genuine trade-down demand. Comparable sales grew 3.4% even as growth cooled. Ong's comment that more affluent households are trading down to Walmart points to Walmart gaining a customer segment it did not previously serve as heavily, a structural tailwind even during a broader spending slowdown. The Home Depot, Inc. (NYSE:HD) is benefiting directly from consumers' shift toward smaller, more deliberate purchases rather than losing out to it. Home Depot's strength is among budget-conscious do-it-yourselfers. It suggests homeowners are substituting professional contractor work with DIY projects to save money, a behavior shift that funnels spending toward Home Depot's core business rather than away from it. Consumers are not retreating from spending altogether, only becoming more selective about where it goes, which favors well-positioned retailers over the category as a whole. eToro's Lale Akoner said households are "becoming much more deliberate about where their money goes," not cutting spending broadly, meaning retailers that consistently deliver value, as Walmart and Home Depot have positioned themselves to do, are better placed to capture that more deliberate spending than competitors relying on broad discounting alone. Shrinking basket sizes point to a demand problem that price cuts alone are not solving. Shoppers continued visiting Walmart and Target but spent less per trip, and McDonald's discounted menu items failed to draw customers this quarter even in an otherwise expensive menu, according to Reuters, evidence that promotional pricing is losing its power to offset consumers' underlying caution. Walmart Inc. (NASDAQ:WMT)'s growth deceleration is happening despite, not because of, favorable positioning. Even with more affluent households trading down to Walmart, a dynamic that should be adding incremental sales, the company still could not sustain rising average spending growth. It shows the pressure on household budgets is broad enough to offset even Walmart's trade-down tailwind. The Home Depot, Inc. (NYSE:HD)'s strength is linked to a specific, cautious consumer behavior, DIY substitution, that shows broader economic pullback rather than confidence. Consumers choosing to do home projects themselves instead of hiring professionals is typically a sign of tightened discretionary budgets. It means Home Depot's current strength may show the same underlying consumer caution pressuring Walmart, just channeled into a different purchase decision. Both retailers are operating in the same cautious consumer environment, but the read on each differs. Walmart gains when wealthier households trade down to cut costs, while Home Depot wins when shoppers switch to do-it-yourself projects. However, slowing growth at both stores shows that broader budget pressures force Americans to spend far more selectively. While we acknowledge the potential of WMT as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: Warren Buffett "Blew It" on Alphabet (GOOGL) And Made It Berkshire's Third-Biggest Bet and Sony Group (SONY) and Taiwan Semiconductor (TSM) Are Betting $4.7 Billion on the "Eyes" of AI Machines. Disclosure: None. This article is originally published at Insider Monkey.

Walmart Inc. (NASDAQ:WMT) and Target Corporation (NYSE:TGT) have started to regularly surface on Jim Cramer's radar. In a recent appearance, the CNBC TV host pointed out that the latter was doing well than the former. Looking at the share price, Walmart Inc. (NASDAQ:WMT)'s shares are up by roughly 7% while Target Corporation (NYSE:TGT) has gained more than 60%. Ahead of WMT's earnings and the share price dip, Cramer pointed out that he would prefer buying the shares gradually. In his morning appearance on August 24th, the CNBC TV host pointed at Walmart Inc. (NASDAQ:WMT)'s multiple and advised against buying the stock: Walmart Inc. (NASDAQ:WMT)'s narrative concerns the debate about whether the firm's high growth businesses and strong income statement performance are reason enough to ignore high valuation multiples and surprises in its US business. As a retailer, a key metric for Walmart Inc. (NASDAQ:WMT) is its same store sales performance. In the second quarter, the firm reported 2.6% in US comparable same store sales growth that missed analyst estimates of 3.7% and was the slowest in nearly five years. Additionally, Walmart Inc. (NASDAQ:WMT)'s management also outlined that it expects $10 billion in cost headwinds stemming from higher fuel prices in fiscal year 2027. These concerns exist even though the second quarter saw the firm beat analyst revenue and EPS estimates and strong double digit growth in its advertising and eCommerce businesses. Yet, despite the concerns, Walmart Inc. (NASDAQ:WMT) trades at a forward P/E multiple of 35.84, which is more than twice that of TGT's 17. For Target Corporation (NYSE:TGT), the bulls and bears and diverge on whether the firm's strategic initiatives will be worth it. On the former front, the firm grew its comaparable same store sales by 3.8% in the second quarter. More importantly, the growth was driven by a 3.6% jump in store traffic to hint that perhaps the firm's initiatives are translating into consumer interest. Additionally, management also guided full-year sales growth at 5%, which was a point higher than the previous 4% estimate. The initiatives, Roundel advertising, Target+ and Circle 360 Membership grew by 20%, 40% (GMV growth) and 40% (membership revenues) in Q2. Yet, Target Corporation (NYSE:TGT)'s long term revenue growth is trailing the sector and its general expense rate also grew to 21.6% in the second quarter. With the growth and the forward P/E multiple, it's clear why Cramer has switched to Target Corporation (NYSE:TGT). Looking at hedge funds, in Q2, 63 funds held a stake in Target Corporation (NYSE:TGT) while 111 had held a stake in WMT. Target Corporation (NYSE:TGT)'s short interest as a percentage of float of 3% is higher than WMT's 1.42%. READ NEXT: Jim Cramer Draws the Line on NVIDIA in China: Why National Security Comes First and Jim Cramer Defends His Dell Stance as Investors Complain About Missing Out. Disclosure: None.