We recently published an article titled 12 Best Retail Stocks to Buy According to Analysts. On February 17, Evercore ISI raised its price target on Target Corporation (NYSE:TGT) to $105 from $103 while maintaining an In Line rating as part of a fourth-quarter earnings preview. On February 1, 2026, Target Corporation (NYSE:TGT) implemented a leadership transition under which Michael J. Fiddelke assumed the role of Chief Executive Officer and joined the board of directors. His compensation package include ...

Costco Wholesale Corporation (COST), headquartered in Issaquah, Washington, operates membership warehouses globally. Valued at $437.7 billion by market cap, the company offers a diverse range of branded and private-label products, including groceries, electronics, appliances, and automotive supplies, along with pharmacies, optical centers, fuel stations, and travel services. Companies worth $200 billion or more are generally described as “mega-cap stocks,” and COST definitely fits that description, with ...

Core Insights - Inflation remained elevated in January, with consumer price growth exceeding the Federal Reserve's target rate, raising affordability concerns among policymakers [1] CPI Data Summary - The consumer price index (CPI) rose 0.2% month-over-month in January and 2.4% year-over-year, down from 2.7% in December [2] - Core prices, excluding volatile items like gasoline and food, increased by 0.3% from the previous month and slowed to 2.5% year-over-year from 2.6% last month, aligning with economists' expectations [3] Data Collection Impact - Inflation data from December 2025 to April 2026 will be influenced by data collection interruptions due to a 43-day government shutdown [4] - The Bureau of Labor Statistics (BLS) utilized a carry-forward methodology to compensate for missing data, which may introduce a downward bias in inflation data until fresh data is available in spring [5] Cost of Living Breakdown - High inflation has significantly impacted U.S. households, particularly lower-income Americans who spend a larger portion of their income on necessities [6] - Food prices increased by 0.2% in January and are 2.9% higher year-over-year, with the food at home index up 2.1% and food away from home index up 4% [7] - Energy prices decreased by 1.5% month-over-month and are down 0.1% year-over-year, with gasoline prices falling 3.2% for the month and 7.5% year-over-year [9] - Housing prices rose 0.2% in January and are up 3% annually, with the shelter index being the largest contributor to the overall CPI increase [10] Sector-Specific Price Changes - Transportation services costs increased by 1.4% in January and are 1.3% higher than a year ago, with airline fares jumping 6.5% for the month [11] - Medical care costs rose by 0.3% in January and have increased by 3.9% over the past year [11]

Group 1 - Costco Wholesale Corporation (NASDAQ:COST) is currently trading at a high valuation, approximately 50 times earnings, which raises concerns about its stock price being too "rich" for new investments [1] - The company's re-up rate, which indicates customer retention and repeat purchases, is not as strong as desired, despite the stock experiencing a bounce [1] - Costco operates membership warehouses offering a wide range of products and services, including groceries, fresh food, household goods, electronics, pharmacies, gas stations, optical centers, and e-commerce options [2] Group 2 - There is a belief that certain AI stocks may present greater upside potential and carry less downside risk compared to Costco, suggesting a shift in investment focus for some investors [3]

Core Viewpoint - Costco Wholesale (COST) shares have increased by 16% over the past month, currently trading at $983.25, but a multi-factor evaluation suggests it may be prudent to sell the shares due to a very high valuation and a negative outlook on the stock [1][3]. Valuation - Costco has a market capitalization of $437 billion, but its valuation appears very high, with a suggested target price of $687 [5][4]. - The stock is considered unattractive due to its very high valuation despite moderate operational efficiency and financial health [3][4]. Growth - Costco has experienced an average revenue growth rate of 6.7% over the last three years, with revenues increasing by 8.3% from $259 billion to $280 billion in the past 12 months [7]. - Quarterly revenues rose by 8.3%, reaching $67 billion in the most recent quarter, up from $62 billion a year prior [7]. Profitability - Over the last 12 months, Costco's operating income was $11 billion, resulting in an operating margin of 3.8% [8]. - The company generated approximately $15 billion in operating cash flow during this period, with a cash flow margin of 5.3% [8]. - Costco's net income for the same timeframe was nearly $8.3 billion, leading to a net margin of around 3.0% [8]. Financial Stability - As of the end of the most recent quarter, Costco had a debt of $8.1 billion, with a debt-to-equity ratio of 1.9% [9]. - The company holds $17 billion in cash (including cash equivalents) within total assets of $83 billion, resulting in a cash-to-assets ratio of 20.8% [9]. Downturn Resilience - Costco has shown more resilience than the S&P 500 index during various economic downturns, recovering quickly from declines [10]. - Historical data indicates that Costco shares have fully recovered from significant drops during the 2022 inflation shock, the 2020 COVID pandemic, and the 2008 global financial crisis [12].

Core Viewpoint - Target Corporation is experiencing challenges but shows potential for recovery with a new CEO and a current stock yield of 4% [1] Group 1: Financial Performance - Target reported a slight revenue miss and a 2.7% decline in same-store sales [2] - The company achieved a modest earnings beat of 7 cents off a $1.71 basis [2] - Target has reduced the high end of its full-year earnings forecast [2] Group 2: Investment Sentiment - Jim Cramer suggests holding onto Target shares and potentially increasing the position if the stock price reaches $100 [1] - Cramer expresses a long-standing positive view of Target and is interested in speaking with the new CEO [1]

Group 1: Berkshire Hathaway and Kraft Heinz - Berkshire Hathaway may sell its 27.5% stake in Kraft Heinz, potentially ending a decade-long investment [5] - Kraft Heinz disclosed that Berkshire may offer to sell 325,442,152 shares, with the stock down nearly 4% in premarket trading [5] - The merger of Kraft and Heinz in 2015, orchestrated by Buffett and 3G Capital, has not performed as expected, leading to a $3.76 billion write-down on Berkshire's stake [6] Group 2: Kraft Heinz Corporate Strategy - Kraft Heinz's board approved a plan to separate the company into two independent, publicly traded entities through a tax-free spin-off, aimed at simplifying operations and improving performance [7] Group 3: Amazon's Retail Expansion - Amazon plans to open its largest retail store in Orland Park, Chicago, covering approximately 230,000 square feet, offering groceries and general merchandise [9] - The project will not receive financial incentives from Orland Park but is expected to generate significant sales and property tax revenue, creating around 200 construction jobs and 500 permanent positions [10] Group 4: Market Overview - Dow, S&P, and Nasdaq futures are in the green, while crude oil is down 0.6% at $59 per barrel [13] - Bitcoin is up 1.1% at $89,000, and gold has increased by 2% to $4,862 [13]

Core Viewpoint - AMCON Distributing Company reported a fully diluted earnings per share of $1.28 and a net income of $0.8 million for the first fiscal quarter ended December 31, 2025, indicating a focus on customer service and strategic growth through acquisitions in the convenience and foodservice distribution sector [1][2]. Financial Performance - For the fiscal quarter ended December 31, 2025, the wholesale distribution segment generated revenues of $719.3 million with an operating income of $6.9 million, while the retail health food segment reported revenues of $10.8 million and an operating loss of $0.2 million [3]. - The total sales for the quarter, including excise taxes, amounted to $730.1 million, compared to $711.3 million in the same quarter of the previous year, reflecting a growth in sales [7]. - The gross profit for the quarter was $48.0 million, up from $46.9 million year-over-year, while operating income increased to $3.9 million from $3.7 million [7]. Balance Sheet Highlights - As of December 31, 2025, AMCON's total assets were $378.7 million, down from $391.1 million at the end of September 2025 [6]. - Shareholders' equity increased to $114.1 million from $113.1 million in the previous quarter, indicating a stable equity position [4][6]. Strategic Initiatives - The company is committed to enhancing its customer service through proprietary foodservice programs and custom merchandising, aiming to provide retail partners with competitive advantages against the Quick Service Restaurant industry [2]. - AMCON is actively pursuing strategic acquisition opportunities to align with its customer-focused philosophy and to further the legacy of existing enterprises in the convenience and foodservice distribution space [2]. Operational Insights - The company emphasized the importance of managing its balance sheet and maximizing liquidity, particularly in light of inflationary pressures affecting operating expenses across various sectors [4]. - AMCON operates 14 distribution centers across 34 states and runs 15 health and natural product retail stores, showcasing its extensive reach in the convenience and foodservice distribution market [4].

Core Viewpoint - Albertsons Companies, Inc. is facing challenges in its sales growth and earnings outlook due to external factors such as food disinflation and changes in government benefits, while also experiencing some strengths in its pharmacy business [2][3][5]. Financial Outlook - Albertsons forecasts identical sales growth for the full year to be between 2.2% and 2.5%, slightly lower than its previous guidance of 2.2% to 2.75% [6]. - The company expects adjusted net income to be in the range of $2.08 to $2.16 per Class A share, compared to the earlier range of $2.06 to $2.19 [6]. Market Conditions - Deutsche Bank has resumed coverage of Albertsons with a Hold rating and a price target of $18, indicating a mixed outlook for 2026 influenced by food disinflation and consumer behavior focused on value [2]. - The company noted that disruptions in SNAP benefits during Q3 reduced identical sales by approximately 10 to 20 basis points [4]. Business Performance - Despite challenges, Albertsons' pharmacy business showed strength due to demand for immunizations and GLP-1 therapies, which helped mitigate some negative impacts from SNAP disruptions [5]. - Consumer behavior is shifting towards cheaper products, particularly among low- and middle-income groups, as inflation remains high [5].

Group 1 - Walmart Inc. has been recognized as a preferred choice for cash-strapped consumers, with its stock increasing over 23% last year due to its appeal and low prices [1] - Doug McMillon, the retiring CEO, has been credited with making Walmart stores more appealing while maintaining low prices, which attracted customers from the upper middle class [1] - The price-to-earnings ratio of Walmart has surged into the 40s, indicating a significant increase in valuation [1] Group 2 - Walmart has successfully navigated a challenging retail environment, with McMillon leading efforts to keep prices low amidst inflation, which has been described as a personal "one-man war" against inflation [2] - Despite the potential of Walmart as an investment, there are suggestions that certain AI stocks may offer greater upside potential and less downside risk [2]