We recently published a list of 10 Worst Blue Chip Stocks to Buy. In this article, we are going to take a look at where Target Corporation (NYSE:TGT) stands against other worst blue chip stocks to buy.
As per Niamh Brodie-Machura, Co-Chief Investment Officer at Fidelity International, the effect of tariffs is expected to shift lower as and when the deals are made, supply chains adapt, and there is some adjustment in consumption patterns with lower tariffed goods witnessing relatively increased demand. However, there continues to be a period of increased volatility, and investors who plan to add risk should be careful. The environment is more of an opportunity to better position portfolios for resilience amidst uncertainty.
Contrary to expectations, BlackRock, in its release dated April 23, highlighted that international equities outperformed the US equities by 11% in 2025. The US growth stocks fell by 10%, and US value stocks increased by 2%. This transition demonstrates a significant market rotation throughout geography and style as value stocks continue to gain favor over growth stocks. Within the US market, value equities, mainly in defensive sectors such as healthcare, have been performing well, says the asset manager.
BlackRock also added that the narrowing of the earnings gap and the industry’s attractive characteristics, like innovation and the growth of aging populations, have been fueling the performance. Notably, active management strategies are advantageous when it comes to navigating the fluctuating markets.
BlackRock believes that the US large-cap value equities are the only major US index having positive returns YTD through March 31. Among the value equities, its investors are spotting opportunities in defensive sectors. In the current fast-moving political environment, primarily new trade policies, value equities can possess an additional tailwind. This stems from their ability to fetch a greater share of revenue from the US.
Elsewhere, if tariff discussions continue longer than expected or the average tariff rates differ from the current expectations, it is important to make portfolio changes accordingly, says Fiduciary Trust (a privately held wealth management firm). Notably, the capex spending on AI is expected to remain strong, and AI will likely fuel long-term productivity. The firm also opines that changes will be made to bank capital ratio rules, enabling them to enhance lending and/or increase stock buybacks. Both of these measures can improve earnings.
To list the 10 Worst Blue Chip Stocks to Buy, we scanned through the holdings of SPDR® S&P 500® ETF Trust and chose the ones that declined between 15%-30% on a YTD basis. After getting an extended list of stocks, we selected the ones popular among hedge funds. Finally, the stocks were ranked in ascending order of their hedge fund holdings, as of Q4 2024.
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).
Is Target Corporation (TGT) the Worst Blue Chip Stock to Buy?
A woman purchasing groceries at a Target store, with a cart full of products.
Number of Hedge Fund Holders: 56
% Decline on a YTD Basis: ~29.7%
Target Corporation (NYSE:TGT) operates as a general merchandise retailer. Analyst Mavis Hui from DBS reiterated a “Buy” rating on the company’s stock, keeping the price objective at $188.00. The analyst’s rating is backed by factors demonstrating the company’s healthy performance and strategic initiatives. A YoY increase in adjusted EPS was aided by a recovery in customer traffic and gross margins’ improvements, added the analyst. Target Corporation (NYSE:TGT)’s emphasis on omni-channel growth remains a critical factor in the analyst’s rating. The company continues to enhance its online and offline sales integration.
Furthermore, the investments in store remodeling and partnerships with well-established brands such as Apple and Disney can fuel both online and in-store sales, says the analyst. Target Corporation (NYSE:TGT)’s efficient use of physical stores as logistics centers led to reduced delivery costs, which can offset the potential margin pressures, added Hui. Despite worries related to the inflationary pressures, Target Corporation (NYSE:TGT)’s robust customer loyalty and operational efficiency improvements support a favourable outlook for growth in future earnings. The company’s digital initiatives can offer valuable data insights, allowing it to optimize inventory management, personalize offerings, and improve operational efficiency. Target Corporation (NYSE:TGT)’s investments in supply chain enhancements and inventory management systems can also result in operational efficiency.
Overall, TGT ranks 10th on our list of worst blue chip stocks to buy. While we acknowledge the potential of TGT as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for a deeply undervalued AI stock that is more promising than TGT but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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