Jim Cramer Says Target Corporation (TGT) ‘Was a Big Winner’

We recently made a list Jim Cramer Wants You to Watch Out for These 10 Stocks. In this article, we’ll take a look at how Target Corporation (NYSE:TGT) stacks up against the other stocks Jim Cramer wants you to pay attention to.

Jim Cramer noted that Tuesday’s correction was expected, as the market had been up for eight straight days, and a ninth day would have put it into rare territory, a streak not seen since 2004. The session was tough, with the Dow down 62 points and the S&P down 2%, almost a 33% loss. The question is whether the market still has the momentum to continue rising, especially since the bad news finally sent stocks lower, something that didn’t happen very often during the last eight-day rally.

“We were due for a modest pullback today – the S&P has been up for eight straight days, and nine more days would put us in thin territory. We haven’t seen a winning streak like that since 2004. Today was a tough session, with the Dow down 62 points and the S&P down 2%, down about 33%. We have to wonder if the market still has the momentum to go higher, because we got some bad news today and guess what – stocks actually fell. That hasn’t happened very often in an 8-day rally.”

Cramer noticed an unusual trend during this winning streak. If a company reported better-than-expected earnings, the stock rose. Even if the results were only slightly better than feared, the stock still rose. And if a company reported disappointing earnings, the market ignored it, assuming it was the last bad quarter because the Fed might cut rates soon, so people bought anyway.

“You see, we had a very strange pattern during the winning streak. It was a little bit of Pangloss and a little bit of Camelot. When a company reported a better-than-expected quarter, it was great. When a company reported a quarter that was just better than feared, the stock continued to rise. And when a company reported a weak quarter, we figured that was the last weak quarter because the Fed was going to cut interest rates, so it wasn’t a big deal — buy anyway. In other words, companies couldn’t go wrong, but not today. Today we had a bit of a reckoning, a dose of reality.”

Jim Cramer noted that the market had enjoyed a period where strong performance was driving stocks, and even weak performance was tempered by the belief that the Fed would step in to help. But after seven straight days of gains, he indicated that this bullish pattern may be coming to an end. The market has now reached a level where stocks will no longer be automatically viewed as a risk. Cramer explained that we are returning to a more typical environment where strong stocks rise and weaker stocks fall. At these high levels, it is no longer enough to dismiss the bearish outlook with a simple “heads I win, tails you lose” mindset.

“We’ve reached a point where the market is sufficiently elevated and we’re back to normal—where good stocks go up and bad stocks go down. At these high levels, we can’t just dismiss the bears and say, ‘Heads I win, tails you lose.’ Rationality is back, and rationality is the enemy of a market where everything is going up and down.”

Our methodology

In this article, we’ve analyzed Jim Cramer’s latest tweet and his latest insights on what to watch in the stock market on Tuesday. We’ve highlighted the ten stocks he mentioned and provided details on hedge fund sentiment for each one. The stocks are ranked based on the number of hedge funds that own them, from lowest to highest.

At Insider Monkey, we’re fascinated by the stocks that hedge funds invest in. The reason is simple: Our research has shown that we can outperform the market by mimicking the top stock picks of the best hedge funds. Our quarterly newsletter strategy selects 14 small- 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 grocery shops at Target with a cart full of items.

Target Company (NYSE:TGT)

Number of hedge fund investors: 52

Jim Cramer singled out Target Corporation (NYSE:TGT) as a standout performer, noting that the company’s shares were up more than 14%. The gain came after Target Corporation’s (NYSE:TGT) strong earnings and revenue results for the quarter. CEO Brian Cornell attributed the positive results to the successful price reduction of 5,000 items in May, which resonated well with customers.

“Target was the big winner. Shares jumped more than 14% after the big retailer beat earnings and revenue for the quarter. CEO Brian Cornell said customers were responding to May price cuts on 5,000 items.”

Target Corporation (NYSE:TGT) stands out as a strong investment choice due to its solid financial performance and strategic growth efforts. Target Corporation (NYSE:TGT) has consistently demonstrated strong revenue growth and strong profit margins, with 6% revenue growth and 4% comparable sales growth in its Q2 2024 earnings report. This indicates Target Corporation’s (NYSE:TGT) effective supply chain management and strong consumer demand. Target Corporation’s (NYSE:TGT) investments in improving its online and in-store operations, along with its successful omnichannel strategy, are driving its market share.

Target Corporation’s (NYSE:TGT) focus on same-day services, such as pickup and delivery, is attracting more customers and strengthening the company’s competitive position. Additionally, Target Corporation’s (NYSE:TGT) stock is currently attractively valued compared to its historical and retail averages, suggesting it is undervalued and a good buying opportunity. Target Corporation’s (NYSE:TGT) strong brand and customer loyalty, bolstered by popular private labels such as Good & Gather and Cat & Jack, further support its stability and growth potential.

ClearBridge Value Equity Strategy stated in its Q2 2024 investor letter that:

“Conversely, stock selection in the consumer staples sector was a relative depreciator. The largest depreciator in this sector was Target Corporation (NYSE:TGT), a consumer goods retailer that came under pressure after its first-quarter earnings fell short of market expectations. In addition to higher spending, driven by a focus on newer, higher-quality goods, a series of higher-than-expected inflation readings and falling consumer confidence have created a more challenging environment for discretionary spending.”

Total TGT cost takes 7th place on our list of stocks Jim Cramer wants you to watch. While we recognize TGT’s potential as an investment, our belief is based on the belief that AI stocks that are flying under the radar have a better chance of achieving higher returns, and in a shorter period of time. If you’re looking for an AI stock that has more promise than TGT but is trading at less than 5 times earnings, check out our report on cheapest AI action.

READ MORE: $30 Trillion Opportunity: The 15 Best Humanoid Robot Stocks to Buy, According to Morgan Stanley AND Jim Cramer says NVIDIA has ‘become a wasteland’.

Disclosure: None. This article was originally published on Insider Monkey.