Target Vs. Walmart: Which is the Better Retail Stock Ahead of Q3 Results?

Core Insights - Walmart has shown steady growth with a stock increase of +14% in 2025, while Target's stock has decreased by 30% [1] - Target's Q3 sales are expected to decline by 1% to $25.36 billion, with an EPS drop of 5% to $1.76, and has missed EPS expectations in three of the last four quarters [2][3] - Walmart's Q3 sales are projected to rise over 4% to $177.14 billion, with an EPS increase of 5% year over year to $0.61, and has exceeded earnings expectations in three of the last four quarters [3][4] Performance Comparison - Walmart has achieved over +100% gains in the last five years, generating more than $100 billion in digital sales annually, while Target has seen a decline of over 45% due to weaker sales growth and narrower margins [5] - Target is trading at a significant discount compared to the S&P 500 and its historical median, while Walmart trades at a premium due to justifiable EPS growth [7] Dividend and Investment Outlook - Both Walmart and Target are considered viable long-term investments due to their status as dividend kings, with Walmart's dividend yield at 0.92% and Target's at 5.07% [10][11] - The upcoming Q3 reports will be crucial in determining the future performance of both stocks, with Walmart potentially having more upside and Target needing a turnaround in operational efficiency [10][11]