Costco, Walmart and 3 Other Retailers Offer Items for a Good Value — but What About Their Stocks?
Written by
Josephine Nesbit
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T. Woods
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With so many retail stocks to choose from, it can be difficult to decide where to invest your money. Retail stocks allow investors to own a portion of the businesses where they shop, but not all offer the same value.
If you’re looking for stocks that offer good value for investors, look no further. Here are several retail stocks to consider.
1. Costco
Costo’s bargain prices and high-quality items are what make it one of America’s most reputable brands. According to TipRanks, Costco seems poised to benefit once the economy recovers. But even if it doesn’t, it’s still tough to top Costco.
Shares of the warehouse club are at all-time highs. Stocks are up nearly 67% over the past year, and expectations are high for Costco’s upcoming quarterly earnings report. Despite Costco stocks running hot, TipRanks said the company still continues to deliver value while adding new items to its shelves.
“As the firm taps into the power of its data, I expect its strengths will carry over into a booming economy that sees discretionary good demand take off,” TipRanks said.
2. Walmart
Walmart stock is the most expensive it has been in two decades, according to TipRanks, and beat analyst expectations for the first quarter of this year. Walmart brought in $161.5 billion in revenue – above the $159.58 billion projected revenue — and a 5.8% increase year-over-year, Morning Brew reported. Adjusted earnings per share were $0.60, also beating the $0.53 forecast. The company expects net sales to increase by 3% to 4%, and earnings per share to be somewhere between $2.23 to $2.37.
According to Morning Brew, analysts and investors see Walmart’s stock as a bellwether for the economy of the discount retailer’s focus on low-cost essentials. These items typically sell well even when the rest of the economy is slowing, or prices are rising. Walmart is also investing more into an advertising business vertical as well as automating its supply chain.
3. Amazon
Amazon, one of the world’s most valuable companies, saw significantly higher demand in 2020 and 2021 as shoppers shifted to online spending, encouraging the company to expand its capacity, The Motley Fool reported. But now that demand has cooled, Amazon is turning its attention to boosting productivity, cutting expenses and investing in artificial intelligence, especially its Amazon Web Services (AWS) cloud business.
Following the company’s first quarterly earnings report of the year, Amazon stock analysts are bullish on the retailer’s improving profitability and ability to fight off any challenges. For the quarter ending in March, Amazon reported a 216% year-over-year increase in earnings, and sales were up 13% to $143.3 billion. Both metrics beat analysts’ estimates, and Wall Street analysts are broadly positive on Amazon stock, added Investor’s Business Daily.
4. Target
Target struggled in the first quarter of 2024, contracting by 3.1% with a revenue of $24.53 billion. Despite this, MarketBeat said Target is still a solid retail name with a healthy balance sheet, cash flow and capital return. The stock is worth buying, but MarketBeat noted that there may be a better time to do it. The company’s stock is compared to Walmart, and the dividend is substantial. According to MarketBeat, the pace of distribution growth may slow this year and next, but increases are expected to beat inflation.
5. Ulta Beauty
Ulta Beauty has faced some macroeconomic challenges, but The Motley Fool noted that the company’s performance last fiscal year was admirable. Sales increased by almost 10% in fiscal year 2023 and more than 10% in its fiscal fourth quarter. Comparable sales were up 2.5% in the fourth quarter, but it was a slowdown in growth.
The Fool did point out the loyalty of Ulta’s customers, even if they’re buying cheaper products. Transactions were up 4.5%, but the average ticket was down 1.9%. However, unmet expectations left investors a little disappointed. The Fool reported that this could still be a bargain stock, noting that Ulta could trade sideways, but if the company reports an earnings beat, stocks could go up.
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