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• (0:30) - Finding Strong Investments Within The Retail Sector For Your Portfolio

• (6:30) - Tracey's Top Stock Picks

• (34:45) - Episode Roundup: LEVI, LE, ULTA, TGT, DECK

• Podcast@Zacks.com

 

Welcome to Episode #397 of the Value Investor Podcast.

Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.

The most uncertain industry in 2025 appears to be retail. It has a lot of exposure to the tariffs and the changes in the supply chain. Additionally, when the consumer pulls back on spending, retail will be impacted as well.

Many retail stocks have sold off in 2025.

Are they cheap?

Or are they traps?

Definition of a Value Trap

Reminder, a stock can have a low price-to-earnings (P/E) ratio and still not be a true value. The key is to look at the earnings consensus for this year.

Are earnings expected to grow or decline?

If they are declining, while the stock also has a low P/E, that could indicate the stock is a trap. If they are on the upward swing, while the stock is cheap, it could be a true value.

Are these 5 retail stocks values or traps?

Retail Stocks: Values or Traps?

1. Levi Strauss & Co. (LEVI)

Levi Strauss is the famous San Francisco denim manufacturer. Shares of Levi Strauss have fallen 22% over the last year.

It’s cheap. Levi Strauss trades with a forward P/E of just 14.6. It pays a dividend yielding 2.9%.

Is Levi Strauss a true value, or is it a trap?

2. Lands’ End, Inc. (LE)

Lands’ End is a specialty apparel and accessories retailer. Shares of Lands’ End have been hammered over the last year, falling 37.2%. Even in the last month, as most stocks rallied, Lands’ End fell 0.7%.

But Lands’ End is cheap. It has a forward P/E of just 13.7.

Is Lands’ End a value or a trap?

3. Ulta Beauty (ULTA)

Ulta Beauty sells beauty products online and in its stores in the United States. Ulta shares are higher over the last year, gaining 11.5%. They are also up over the last month, adding 10.5% before their earnings report.

Ulta has a forward P/E above 15, which is the level used to determine value. But with a P/E of 18, it’s not that pricey.

Is Ulta Beauty a value or a trap?

4. Target Corp. (TGT)

Target is one of the largest big box retailers in America. Shares of Target have struggled the last few years and are near 5-year lows. Over the last year, Target shares fell 35.8%. And over the last month, they remain low. They’re still down 1.3% during that time.

Target trades with a forward P/E of 12.6. It also has a dividend now yielding 4.7%.

But Target is also a Zacks Rank #5 (Strong Sell). Only 5% of all stocks that have the Zacks Rank are Strong Sells.