In recent years, Target (NYSE: TGT) has struggled to win over investors, with its larger rival Walmart being the hotter buy.
But this year, the tide seems to have turned, with the former rising by around 33% and the latter being up just 2%
What’s behind Target’s sudden surge this year, and can this trend continue? Here’s a closer look at whether the retail stock is still a good buy right now, or if it may be running out of steam. Target’s improving growth rate doesn’t tell the whole story A major problem for Target in recent years has been a lack of consistent growth.
Unlike Walmart, it relies more heavily on discretionary purchases, so when the economy isn’t in great shape, the business isn’t likely to do well. That being said, the economy arguably isn’t doing all that well now, and yet, Target’s growth rate has been rising, as you can see from the chart below. The recent results may look impressive and have you thinking that new CEO Michael Fiddelke, who took over this year, may have fixed what has been ailing the business.