Cramer scoffs at Target’s sharp decline, calls the stock a better buy than Walmart

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  • CNBC’s Jim Cramer said Target shouldn’t trade less like Walmart a day earlier because the big-box retailer’s quarterly results were “fantastic” on Wednesday.
  • “The one that probably makes the most sense to buy is Target,” Cramer said. “I guess Target didn’t say anything that makes it so it merits being so down.”
  • “People don’t want to hear that you ate something [in terms of higher costs], They want the customer to eat everything.”

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CNBC’s Jim Cramer said Target shouldn’t trade less like Walmart a day earlier because the big-box retailer’s quarterly results were “fantastic” on Wednesday.

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“Seeing the target below $12 is just an enigma [or roughly 5%]Cramer said, referring to the stock’s premarket decline at the end of the “squawk box.”

“The one that probably makes the most sense to buy is Target,” he said. He said, “As they come down, Target is a better buy than Walmart, which my charitable trust owns. We sold a few more. I guess Target didn’t say anything that makes it that much.” Has the quality of being down.”

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Target reported third-quarter earnings and revenue that topped estimates. The big-box retailer extended the guidance. However, like Walmart on Tuesday, Target investors worried about margins as the company absorbed some of the higher costs of supply chain disruptions and labor shortages instead of passing them on to consumers.

“Maybe they didn’t guide enough. But the target is up, up,” Cramer said — with the stock more than 40% in 2021. “People don’t want to hear that you ate anything. [in terms of higher costs], They want the customer to eat everything.”

Walmart on Tuesday reported third-quarter earnings and revenue that beat expectations. The company won back grocery shoppers because it used its size to help manage poor supply chains and price pressures. Walmart boosted full-year earnings guidance. But the stock fell 2.5% on Tuesday and climbed slightly on Wednesday to close at around $144. The shares were nearly broken for 2021.

Describing Walmart as an “inflation fighter” and a “share taker” on Tuesday, Cramer said, “Walmart is aggressively keeping prices down and so their gross margin is down. But they’re taking a share from everybody.” He blamed Wall Street’s short-sightedness, saying, “This is the moment to partake in a period of inflation.”

on 26 october, Cramer revealed in his CNBC Investing Club newsletter that his charitable trust sold 150 shares of Walmart for only $149 each. After trading, the trust owns 850 shares of Walmart, representing 3.18% of the portfolio.

Disclosure: Cramer’s Trust owns stock in Walmart.

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