We recently compiled a list of the Jim Cramer on Nvidia Plus Other Stocks. In this article, we are going to take a look at where Target Corporation (NYSE:TGT) stands against the other stocks Jim Cramer was talking about.
Jim Cramer, host of Mad Money, recently observed that consumers are no longer focused on brand names but are instead prioritizing companies that offer the best value. Cramer noted that there is a noticeable shift happening in the market, saying:
“We’ve become a nation of cheapskates. I say that as a compliment. Nobody gets away with charging too much anymore, not in this country, no matter what industry, perhaps even the drug industry.”
He pointed out that this shift is happening rapidly, and many companies are being left behind as consumer behavior changes. Cramer said that he has observed this shift firsthand in various settings, including grocery stores, online, malls, and even the stock market.
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Cramer went on to explain that Americans are increasingly fed up with high prices. He said:
“The American people are tired of paying up. They feel gouged, they feel betrayed. They feel that the only thing about brand loyalty is that it isn’t worth a dime. They want a better deal. They’ll eagerly switch lifetime habits in order to save some money because prices are up so much that you feel like an idiot if you’re paying up.”
Reflecting on the market dynamics, Cramer shared his insights from Wednesday’s trading session. Cramer noted that the Dow gained 139 points, the S&P remained flat, and the Nasdaq dipped 0.11%, while the midday trading was much more challenging. He emphasized that the trend toward value is not confined to retail alone but is expanding into other sectors, including tech.
At the end, Cramer summed up the situation by saying:
“Prices have gotten so high over the past few years that we’re losing our loyalty to brands. These days, this whole country is about one thing: The Benjamins.”
Our Methodology
For this article, we compiled a list of 8 stocks that were discussed by Jim Cramer during the recent episode of Mad Money on November 20. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, which was taken from Insider Monkey’s database of 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A woman purchasing groceries at a Target store, with a cart full of products.
Target Corporation (NYSE:TGT)
Number of Hedge Fund Holders: 49
Cramer mentioned how Target Corporation’s (NYSE:TGT) stock was recently slaughtered and plunged $33 or over 21% on Wednesday.
“I love Target. I think it’s so much fun to shop there. But in this new sell, sit at home and order worldwide, why do I really care how much fun Target is?… Target’s off 14% (for the year), most likely still falling.”
Target (NYSE:TGT) faced a challenging third-quarter performance. The company’s earnings fell short of both revenue and earnings expectations, marking its most significant earnings miss in two years. The results, which were announced on November 20, caused a drop in the company’s stock price. Sales during the quarter grew by only 1.1% year-over-year, and EPS of $1.85 did not meet analysts’ forecasts.
As per the company, this underperformance was attributed to various ongoing challenges, particularly pressures on profitability. The company cited higher costs associated with digital fulfillment and price reductions on thousands of items as key factors contributing to the earnings miss. Furthermore, net earnings in Q3 dropped by 12.1%, falling from $971 million in the same period last year to $854 million.
Target’s (NYSE:TGT) gross margin rate for the quarter was 27.2%, a slight decline from 27.4% in 2023. This decrease was linked to the rising costs of managing higher inventory levels, an increase in digital sales volume, and the ongoing development of new supply chain facilities. Management also noted that the company’s two discretionary categories, Home and Hardlines, experienced continued softness during the quarter. Consumer spending in these categories remained cautious, further contributing to the company’s struggles.
Overall TGT ranks 6th on our list of the stocks Jim Cramer was talking about. While we acknowledge the potential of TGT as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than TGT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.