Argus' Top 5 Retail Stocks Heading Into The Holidays

In its September research conference call, Argus shared a look into the retail sector as kids return to school and the holiday season starts to lean out. The analysts recommended five retail names that they consider to be best-in-class companies with models that insulate them from e-commerce.

Top 5

1. Home Depot Inc (NYSE: HD): A $154 target price implies an upside of more than 18 percent from current valuations. Argus Director of Research Jim Kelleher explained that Home Depot is not very vulnerable to e-commerce, since its customers go in to buy “a few sticks of lumber, or a few pieces of wallboard or sheet rock.”

2. Lowe's Companies, Inc. (NYSE: LOW): A $90 price target means the stock could surge by more than 21 percent, largely helped by appliances, as Sears Holdings Corp (NASDAQ: SHLD)’ market share falls, Argus Senior Retail Analyst Chris Graja explicated.

Related Link: Argus On Retail, "We Think It's Going To Be A Good Christmas"

3. Kroger Co (NYSE: KR): "Spinach and hamburger meat have also been a little bit Internet resistant,” Argus analysts continued, issuing a $43 target price on Kroger, which implies a potential return of roughly 28.4 percent from current price points.

4. CVS Health Corp (NYSE: CVS): Analysts at Argus see CVS hitting $120, up 25 percent from current valuations. "They've got a big PBM (pharmacy benefit manager) that's able to leverage expenses, take advantage of all the information technology, they've got innovations in things like 90-day prescriptions and monitoring of health conditions,” the experts added.

5. Costco Wholesale Corporation (NASDAQ: COST): Costco is seen by Argus analysts as the only U.S. retailer that’s “truly a success internationally.” The $175 target price entails an increase of almost 14 percent from current valuations.

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Disclosure: Javier Hasse holds no interest in any of the securities or entities mentioned above.

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