Is Target Corporation (TGT) the Most Oversold Large Cap Stock to Invest in Now?
March 31, 2025
We recently published a list of 12 Most Oversold Large Cap Stocks to Invest in Now. In this article, we are going to take a look at where Target Corporation (NYSE:TGT) stands against other most oversold large cap stocks to invest in now.
Wall Street is being impacted by the uncertainty surrounding the tariff news. The broader has dropped a lot since Trump took office on January 20, and investors are mostly worried about tariffs because they think they could hurt economic growth and cause inflation. Investors think trade policies can reduce consumer confidence and restrict businesses’ ability to invest capital, while Trump believes tariffs can boost national revenue, promote broad-based growth, and be used as a negotiation weapon with other nations.
According to Franklin Templeton, the Magnificent Seven’s supremacy in AI has allowed US stocks to generate significant returns over the last few years, with the broader market frequently hitting all-time highs. The outlook for the market as a whole is favorable, notwithstanding high valuations. Sales growth has been accelerating, innovation and investment are still happening at a rapid pace, and this year’s earnings are predicted to increase by double digits. Additionally, the administration of the US economy is more business-friendly. However, there are concerns, primarily associated with US trade policy and the anticipated effects of tariffs on important industries, such as technology.
Franklin Templeton thinks that despite these risks, investor confidence in US stocks should continue to be high. The new administration’s policy reforms are anticipated to finally produce long-term benefits for the larger US economy, notwithstanding the possibility of increased dangers.
Franklin Templeton also stated that although the Mag 7 stocks are positioned for long-term success, market leadership is anticipated to expand as and when innovation accelerates. According to the investment firm, active management is crucial. The transition from AI platforms to infrastructure is still in progress. Consequently, it is anticipated that the success of investments will depend on the ability to select the appropriate companies at the right time—those that have the technology, strategy, and flexibility to continue and sustain long-term growth.
Thanks to innovation and investment, US stocks—mostly large-cap stocks—have been doing well. Notably, the Dow index has increased by more than 4.5% in the last six months. The investment business sees expanding chances beyond such market leaders, even though the Mag 7 stocks still sustain the market momentum. The competitive landscape is still dynamic and has been generating new development sectors as a result of the ongoing AI-driven cycle.
For our methodology, we screened for stocks with a market capitalization exceeding $10 billion and a relative strength index (RSI) below 40. We then ranked these stocks based on the lowest RSI as of March 23, 2025. An RSI below 40 suggests that the stock is oversold.
At Insider Monkey, we are obsessed with hedge funds. 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A woman purchasing groceries at a Target store, with a cart full of products.
Relative Strength Index: 22.41
Target Corporation (NYSE:TGT) tops the list for being one of the most oversold stocks. It is a major US general merchandise retailer offering a broad assortment of products, including apparel, home goods, electronics, food and beverages, and household essentials. The business uses an omnichannel model to serve clients, offering curbside pickup, same-day delivery, and in-store shopping in addition to operating large-format stores and an online store. With an emphasis on style, value, and customer experience, the business offers a blend of national brands and premium private labels.
With an emphasis on maintaining or increasing market share in the majority of its categories, Target Corporation (NYSE:TGT) announced goals to generate over $15 billion in revenue growth over the next five years. The business performed well in several areas, including Beauty, which saw sales and share increases of about 7%; Apparel, which saw share increases across three quarters; and Home, Books, and Toys, which saw gains over the holiday season. While Target Plus Marketplace has achieved $1 billion in sales and is expected to reach $5 billion in GMV over the next five years, the company’s digital business has expanded to $20 billion, indicating nearly 9% growth in Q4. Over the year, 13 million new members joined the company’s loyalty program, Target Circle, which has quadrupled its membership since its inception.
Target Corporation (NYSE:TGT) has made great strides in decreasing inventory shrinkage in terms of operational efficiency. The company has recovered roughly one-third of the 120 basis points of pressure that had previously been present, as the improvement in shrinkage provided a tailwind of about 40 basis points to the operating margin rate for the entire year. Management is making cautious plans for 2025, estimating an adjusted EPS of $8.80 to $9.80 and predicting comparable sales to be stable, with a slight increase in the operating margin rate. In addition to constructing more than 20 new stores and renovating numerous others along the network, the firm aims to invest $4 billion to $5 billion in stores, supply chains, and technology this year.
Overall, TGT ranks 1st on our list of most oversold large cap stocks to invest in now. While we acknowledge the potential of TGT, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than TGT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
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