Wal-Mart Stores, Inc. (WMT) and Target Corporation (TGT) Have It Just as Bad as the American Consumer

Steinhafel did say that he still expects the Canadian business to add $0.80 to EPS by 2017. If this occurs, the initial investment will have been worthwhile. However, this is Target’s first expansion outside the U.S., and investors should recognize that this entails more risk than simply opening more stores within the U.S. In short, Target will grow faster than Wal-Mart, but there is a significant chance that this will not produce the profit growth management expects.

Foolish bottom line

Wal-Mart and Target are both solid businesses that reliably produce significant cash flow and have strong market positions. However, neither company is growing very quickly anymore, and neither stock is particularly cheap. With both companies reporting relatively downbeat earnings and guidance yet again, neither stock seems particularly attractive, particularly considering the other good investment opportunities in retail.

The article Wal-Mart and Target Have It Just as Bad as the American Consumer originally appeared on Fool.com and is written by Adam Levine-Weinberg.

Fool contributor Adam Levine-Weinberg has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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