Analyst picks Target over Walmart despite stronger sales growth
Target’s lower valuation, higher dividend yield and signs of a turnaround have outweighed Walmart’s stronger operating track record for one Motley Fool analyst.
Target has emerged as the preferred September stock pick over Walmart for a Motley Fool analyst, despite the two retailers’ sharply different long-term records.
Target shares are reported to have risen 68% in 2026, while Walmart shares have declined 4% year to date. Over five years, however, Walmart’s stock has more than doubled and Target’s has fallen by about one-third.
The valuation gap favours Target. The retailer is reported to trade at about 17 times trailing earnings, compared with Walmart at about 39 times. Target’s reported dividend yield is 2.8%, versus 0.9% for Walmart.
Both companies are described as Dividend Kings, having increased their annual dividends for at least 50 years. Walmart has the stronger recent revenue performance, with trailing growth of 6.2% compared with Target’s 2%, and is characterised in the article as benefiting from tight cost controls, rapid inventory turnover and resilience during recessions.
The analyst’s case for Target rests on a potential turnaround under chief executive Michael Fiddelke. Target has set a 4% sales target and allocated US$2 billion to renovations and operational improvements, according to the article. The analyst says the retailer is gaining market share, reportedly at Walmart’s expense.
The recommendation reflects one analyst’s view, while the reported performance, valuation and yield figures can change with market prices and company updates.
