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Forget Icahn & Dollar Tree, Buy These 3 Retail Stocks Instead


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Shares of Dollar Tree DLTR soared nearly 7% Tuesday on the back of a report that said activist billionaire investor Carl Icahn is amassing a significant stake in the discount retail firm. With that said, the holiday shopping season looks to be strong amid sky-high consumer confidence. So, let's take a look at three other discount retail stocks that seem like they might be better buys right now.

Dollar Tree saw its stock price jump after The New York Post reported that Icahn had taken a "significant" stake in the company. Icahn is well-known for pushing for executive-level changes, among other things. The report comes roughly four years after DLTR acquired Family Dollar, which Icahn owned a stake in.  

Investors should note that it is still very unclear what Icahn hopes to achieve at Dollar Tree, and some of the bigger DLTR gains could have come already-at least in the short-term. Therefore, it might be a better idea to look elsewhere in the discount retail sector after September's Consumer Confidence Index closed in on an 18-year high.

Meanwhile, the National Retail Federation announced recently that it predicts holiday retail sales will jump as high as 4.8% to reach $720.89 billion. Now it's time to dive into three retail stocks that appear to be solid buys at the moment.

Target TGT

Target, along with Costco COST , Walmart WMT , and other giants, now offers more delivery and e-commerce options to help better compete against Amazon AMZN . The Minneapolis-based company has also redesigned many of its stores and opened smaller locations in urban areas and college towns over the last year.  

Looking ahead, Target's third-quarter revenues are expected to pop 6.5% to hit $17.75 billion, based our current Zacks Consensus Estimate. Plus, Target's comparable store sales-a key retail metric-are expected to jump by 5% in Q3, based on our NFM estimates. Meanwhile, Target's adjusted Q3 earnings are projected to jump by approximately 20.9% to reach $1.10 per share.

Furthermore, Target has earned nine full-year revisions and seven for fiscal 2019 over the last 60 days, with nearly 100% agreement to the upside. This helps Target earn a Zacks Rank #2 (Buy). TGT also sports "A" grades for both Value and Growth in our Style Scores system.

TJX Companies TJX

TJX, which owns HomeGoods, T.J.Maxx, and Marshalls, saw its consolidated comparable store sales pop 6% last quarter, while net sales jumped 12%. The firm also noted that its customer traffic increased at TJX and Marmaxx for the 16th straight quarter. Looking ahead, the off-priced apparel and home fashions retailer is projected to see its quarterly revenues jump 7.75% to hit $9.44 billion, while its full-year revenues are expected to climb 7.1%.

Moving on, TJX's adjusted quarterly earnings are projected to surge 21% to hit $1.21 per share. Meanwhile, its full-year EPS figure is expected to jump just over 21%. TJX has seen a ton of positive earnings estimate revision activity for its current fiscal year as well as the following year to help it land a Zacks Rank #2 (Buy). The company also rocks an "A" grade for growth.

Burlington Stores BURL

Burlington's adjusted earnings skyrocketed 51% last quarter. The off-priced retailer, which operated 651 stores at the end of last quarter, also saw its comp sales pop 2.9%. Investors should be happy to note that Burlington's adjusted quarterly earnings are again expected to expand by 50% to reach $1.05 per share. Meanwhile, its adjusted full-year EPS figure is projected to surge 42.3%.

Burlington has also earned nine upward earnings estimate revisions for its current fiscal year and eight for the following year over the last 60 days, against zero downward changes. This positive movement helps BURL earn a Zacks Rank #2 (Buy). Plus, the company is projected to see its quarterly revenues jump roughly 11.4%.

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Amazon.com, Inc. (AMZN): Free Stock Analysis Report

Target Corporation (TGT): Free Stock Analysis Report

Costco Wholesale Corporation (COST): Free Stock Analysis Report

Dollar Tree, Inc. (DLTR): Free Stock Analysis Report

The TJX Companies, Inc. (TJX): Free Stock Analysis Report

Walmart Inc. (WMT): Free Stock Analysis Report

Burlington Stores, Inc. (BURL): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Stocks
Referenced Symbols: AMZN , TGT , COST , DLTR , TJX



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