On Wednesday, Piper Sandler released findings from its Spring 2025 Teen Survey, indicating favorable trends for Walmart (NYSE:WMT), YETI Holdings , Inc. (NYSE:YETI), and Best Buy Co., Inc. (NYSE:BBY). The survey, which assessed the shopping habits of teenagers at Walmart and Target , revealed that Walmart has increased its share among upper-income teens, particularly in the apparel, beauty, and food categories. Conversely, Target (NYSE:TGT) saw a decline in popularity within the same demographic. According to InvestingPro data, Target's stock has declined nearly 34% year-to-date, trading at an attractive P/E ratio of 9.9x, suggesting potential undervaluation based on InvestingPro's Fair Value analysis.
The survey, which spanned 43 states and included approximately 6,500 teens with an average age of 16.2 years, showed that Walmart's efforts to attract upper-income consumers are paying off. Among upper-income female teens, Walmart's share for beauty products rose to 29% from 28% in the previous survey conducted in the fall of 2024, and for apparel, it increased to 15% from 13%. Upper-income male teens shopping at Walmart for food also increased by 1%. For investors seeking deeper insights, InvestingPro offers comprehensive analysis and 15+ additional ProTips about Target's market position and growth prospects.
YETI's brand awareness remained robust, holding steady at 84%, while ownership among respondents climbed to 58%, with an average of 5.6 YETI products owned. In contrast, Stanley Cups, once a top fashion trend, have seen a decrease in popularity. As for Best Buy, the survey indicated an uptick in the percentage of teens planning to purchase a new PC or laptop within the next six months, rising to 31% from 27% in the fall of 2024.
The percentage of parents shopping exclusively at Walmart has increased across all income levels, with 24% exclusively choosing Walmart over 21% in the previous survey. Walmart also ranked as the number one grocery delivery provider among the average income cohort and third among upper-income households.
Piper Sandler's analysis of the survey results suggests a keen interest in monitoring the evolving shopping patterns at both Walmart and Target, especially in light of Walmart's strategic moves to appeal to higher-income shoppers and Target's recent appointment of Lisa Roath as Chief Merchandising Officer of Food, Essentials, and Beauty. Despite recent challenges, Target maintains a strong dividend yield of 5.05% and has raised its dividend for 54 consecutive years, according to InvestingPro data. The company's next earnings report is scheduled for May 14, 2025, with analysts maintaining a moderate buy consensus.
In other recent news, Target Corporation has announced the launch of its kate spade new york x Target collection, featuring over 300 fashion and home items, with more than half priced at $15 or below. This collaboration, set to debut on April 12, is part of Target's strategy to offer stylish products at accessible prices. In financial developments, Target has successfully closed the sale of $1 billion in notes with a 5.000% yield, maturing in 2035, as part of its broader financial strategy to support growth and manage debt. Additionally, Target declared a quarterly dividend of $1.12 per share, underscoring its commitment to returning value to shareholders.
UBS recently adjusted its price target for Target stock to $155 from $170 while maintaining a Buy rating, citing fluctuating demand trends and the company's proactive measures to improve operations. Target has been reducing production of its own brands in China and plans to further decrease this by the end of next year. The company is also investing in operational improvements, such as reducing lead times in apparel by 20%, to enhance its business performance. These recent developments highlight Target's ongoing efforts to navigate market challenges and maintain financial health.
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