Economists are predicting a gloomy holiday season. Real spending will likely be down thanks to slow economic growth and high inflation this year… not to mention the impact of supply chains.
But consumers still remain robust, so it’s likely that retailers may be oversold going into the holidays. Investors who buy today can grab a reasonable value in any of the big-name big-box stores here. And if things go better than expected, they’ll be well positioned for some quick profits.
Among the big-box retailers, Target (TGT) has held up surprisingly well. Plus, they’re investing in online sales, with new stores that add curbside pickup and same-day delivery options.
That should help the retailer move higher from here, following its 40 percent decline in the past year. Plus, shares trade at 13 times earnings, a discount to other big-box peers.
Action to take: Shares look well-priced for buyers now. And at current prices, shares yield 2.7 percent, and Target has been growing that payout in recent years. This holiday season could make for a good long-term buying point for shares.
For traders, the March $190 calls, last going for $6.25, offer a leveraged way to trade a move higher in shares during and following the holiday season. Traders can likely nab mid-to-high double-digit gains on the stock from here.
Disclosure: The author of this article has a position in the company mentioned here, and may further trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.