Telsey Advisory Group's (TAG) equity research department provided an industry update on three U.S. discounters: Walmart Inc WMT, Five Below Inc FIVE and Target Corp TGT.
In a recent exploration of Northern New Jersey’s retail landscape, Walmart, Five Below, and Target emerged as key players, showcasing festive atmospheres and well-stocked shelves for the holiday season.
“The stores looked festive and were well-stocked for the holiday season. As usual, Walmart was busiest. Five Below and Target also had solid traffic,” analysts Joseph Feldman and Sarang Vora remarked
- For Walmart, TAG rates the stock Outperform with a price target of $185.
- TAG rates the Five Below stock Outperform with a price target of $220.
- TAG rates the Target stock Outperform with a price target of $160.
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Walmart: The remodeled store in Teterboro, N.J., stood out as one of the busiest and most festive locations. The store exuded holiday cheer with a large “Fa La La La La” welcome banner and strategically placed holiday décor.
The aisles were filled with enticing holiday products, from gingerbread house kits to Aquaman and Barbie toys, all attractively priced to boost sales. The grocery section was well-stocked with fresh offerings, enhancing its appeal to customers. Apparel resembled a department store, featuring brands like Reebok and Justice, while home and toy sections displayed a variety of holiday-themed items.
Walmart’s strategic initiatives, including remodels, digital expansion, and a growing ecosystem, position it as a potential winner for the 2023 holiday season.
Five Below: Stores in Clifton and Paramus, N.J., also stood out as well-stocked and bustling with shoppers of all ages. The entrance showcased value products in bins, while the seasonal section displayed a wide range of holiday-focused items, including home décor, ornaments, and stocking stuffers. Fun and affordable stocking stuffers and gifts, such as a Hershey’s brownie skillet and a microscope, were prominently displayed. Five Beyond, the latest store format, featured trend-right items at attractive prices, including a robotic vacuum cleaner and inflatable décor items.
With a focus on newness and value, Five Below remains a top pick for the holiday season, executing well in an uncertain environment.
Target: Stores in Clifton and Paramus were found to be holiday-ready, featuring attractive displays, in-stock levels, and enhanced customer service. The stores presented a gifting station with items across various price points, making shopping convenient. Apparel impressed with holiday-oriented items and festive pajamas across multiple owned brands. The beauty, home, and toy sections showcased a wide range of products from popular brands.
While Target is deemed holiday-ready, tight consumer spending on discretionary products may impact results. However, Target’s long-term growth prospects remain strong, supported by value offerings and company-specific initiatives.
All three retail giants appear well-prepared to cater to consumer needs during the festive season, with each retailer leveraging unique strategies and strengths to attract shoppers and drive sales.
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