In this article, we will look at the 7 Most Undervalued Retail Stocks to Invest In Now.
On March 27, WSJ’s Gunjan Banerji appeared on CNBC’s ‘Power Lunch’ to talk about how retail investors are behaving, and more. She stated that we have seen a shift in the first quarter of 2026. Almost every time we have seen retail buying every dip, pouncing on those opportunities. Now, however, we saw them sell the rip on Monday during the big stock surge, according to JPMorgan, and we are seeing decreased activity.
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She further said that Bloomberg data shows that retail investors recently made up around 18% of stock trading activity, which is down from the fourth quarter and one of the lowest levels since 2024. These trends made the past week the slowest week for retail buying in four months, according to JPMorgan, with volumes down more than 50% from their levels before the Iran war.
Banerji also cited Elon Musk, stating that no one has been more influential with retail investors than him, as he holds a “tremendous power” to ignite enthusiasm among individual investors. With these broader market trends in view, let’s look at the most undervalued retail stocks to invest in now.
A retail store employee demonstrating the features of a video game console.
Our Methodology
We used stock screeners to make a list of retail stocks with a forward P/E under 15 and picked 7 stocks with the highest number of hedge fund holders, as of Q4 2025. We sourced the hedge fund sentiment data from Insider Monkey’s database. The list is sorted in ascending order of hedge fund holders.
Note: All data was recorded on March 30.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
7 Most Undervalued Retail Stocks to Invest In Now
7. Kohl’s Corporation (NYSE:KSS)
Kohl’s Corporation (NYSE:KSS) is one of the most undervalued retail stocks to invest in now. On March 10, Evercore ISI cut the price target on Kohl’s Corporation (NYSE:KSS) to $18 from $21, reaffirming an In Line rating on the shares. The firm believes that the company’s fiscal Q1 same-store sales underwent improvement from the fiscal Q4, down 2% exit rate, and sees “a credible path” for trends to improve in the second half. However, Evercore told investors that in the near term, it expects the stock to be “caught in a tug-of-war” between higher tax refunds and stimulus against weather impacts and higher gas prices.
Kohl’s Corporation (NYSE:KSS) also received a rating update from Citi on March 13, with the firm lowering the price target on the stock to $14 from $20 while reiterating a Neutral rating on the shares. The firm told investors in a research note that Kohl’s Corporation (NYSE:KSS) missed sales and gross margin estimates in fiscal Q4, and it believes the company is not well-positioned to handle macro volatility. Citi sees a balanced risk/reward at current share levels.
Kohl’s Corporation (NYSE:KSS) is involved in the operation of family-oriented department stores, with its business line including footwear, apparel, and accessories for women, men, and children, beauty products, home products, and more.
6. Abercrombie & Fitch Co. (NYSE:ANF)
Abercrombie & Fitch Co. (NYSE:ANF) is one of the most undervalued retail stocks to invest in now. On March 26, Needham initiated coverage of Abercrombie & Fitch Co. (NYSE:ANF) with a Buy rating and a $108 price target. The firm told investors in a research note that the company’s fundamentals are stabilizing after a challenging fiscal 2025, with the Abercrombie brand’s comp sales “dramatically” improving in recent quarters. According to the firm, they could bounce back into positive territory soon, and thus it sees a “compelling risk/reward” at current valuation levels.
In another development, Jefferies cut the price target on Abercrombie & Fitch Co. (NYSE:ANF) to $130 from $135 on March 4, but maintained a Buy rating on the shares. It told investors that while the company delivered “a solid Q4” and FY27 guidance implying 3%-5% sales growth and double-digit margins despite tariffs, it is also important to note that the fiscal Q1 ERP disruption and continued tariff headwinds add uncertainty. Still, the firm believes that the underlying earnings power is “sustainable”, adding that it sees the current volatility creating an opportunity.
Abercrombie & Fitch Co. (NYSE:ANF) is a global omnichannel retailer that offers an assortment of apparel, personal care products, and accessories for women, men, and kids. Its brand portfolio includes Abercrombie brands, which include Abercrombie & Fitch and abercrombie kids, and Hollister brands, including Hollister and Gilly Hicks.
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