J.C. Penney Company, Inc. (JCP), Macy’s, Inc. (M) & More: Who’s The Favorite?

Target Corporation (NYSE:TGT) is ameliorating but looks relatively expensive

Target Corporation (NYSE:TGT) is driving domestic (US) same-store sales growth, improving its merchandising, and getting into the Canadian market with success. That said, the company noted that during the first quarter (1Q 2013), sales have trended weaker than previously expected and, hence, the discount retailer lowered its earnings outlook.

However, the company reiterated that it strongly believes in its ability to attain its previous full-year guide of 2.7% same-store sales growth, as the 1Q 2013 issues were weather-related. Target Corporation (NYSE:TGT) stated that it hasn’t missed sales, they have just been “pushed out” (to a later date during the year).

Target Corporation (NYSE:TGT) seems to be very excited about its Canadian entry, and management said it “feels great about where we are.” Initial sales have been stronger than expected despite the fact that Target Corporation (NYSE:TGT) is not trying to reset market pricing. Trading at at 8x EV/EBITDA, I just think that this company is too expensive.

Bottom line

Some companies within the physical retail space will survive the online era. Others will not. I think Macy’s business model (an enhanced customer’s experience) protects the company somewhat. Besides, Macy’s, Inc. (NYSE:M) trades at reasonable multiples, making it the most compelling alternative within the retail space.

The article Three Retailers – Is There Any Opportunity? originally appeared on Fool.com and is written by Federico Zaldua.

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