Target Is Running Circles Around Walmart

Target (TGT) has been running circles around Walmart (WMT) recently. Last November 20th, Target (TGT) shares closed at their lowest level since 8/15/19.  Since then, TGT has more than doubled with a gain of 103%. WMT has fallen 0.6% over the same period.

On a YTD basis, TGT is up 73.8% compared to a 4.4% decline for WMT.

Last week’s earnings reports only widened the divide, as TGT rallied 4.3% on August 19th, while WMT tumbled 9.2% the next day. Before either company reported, TGT was already up 56% YTD, compared with a gain of just 3.4% for WMT.

TGT’s rally has been backed by two consecutive quarters of positive comparable-sales growth, improving customer traffic, and two earnings triple plays. WMT entered the year following a long stretch of strong performance, but its shares have pulled back sharply since reaching a record high on May 19, down 20.7% since then.

Below is a look at the rolling annual performance spread between TGT and WMT going all the way back to 1981.  TGT is outperforming WMT by 66.5 percentage points over the last year, the widest margin since 2021 when TGT reached its last record high.  This surge for TGT relative to WMT comes right after it had its weakest reading since the early 1980s.

While it may be an impressive run from TGT against its biggest competitor, it still has plenty of ground to make up. TGT reached its record high on November 16, 2021. Since then, the stock has fallen 36.2%, even after doubling from last November’s low. WMT, on the other hand, has gained 123.1% over the same span, leaving it with a 159.3 percentage-point advantage.

While TGT’s recent rally has recovered a meaningful portion of its losses, it hasn’t come close to erasing the gap with WMT that developed after its 2021 peak.