At first glance, Kohl's (KSS +3.46%) stock looks cheaper than a clearance rack at, well, Kohl's. Trading at just 0.11 times sales and 8.6 times trailing earnings, the department store stock is either a no-brainer buy or a failing turnaround story.
Here's the thing about value investing: Sometimes stocks are cheap because they deserve to be. Kohl's sales and earnings have trended downward for years, and its net profit margin is anemic at 1.3%. Kohl's is a falling knife with razor-sharp edges.
Meanwhile, more "expensive" retailers are growing their businesses while delivering stronger shareholder returns.
WMT Revenue (TTM) data by YCharts
When it comes to retail investing, I'll take unstoppable over unredeemable every time. In particular, here's what I like about buying Walmart (WMT 0.33%), Amazon (AMZN +1.25%), and Target (TGT 0.66%) stock in October 2025.
Walmart isn't your grandpa's discount store anymore
There are about 4,600 Walmart stores (and 600 Sam's Club warehouses) in the U.S. market. You might be surprised to learn that the company is even larger abroad with 5,600 international locations.
And Walmart isn't just resting on the laurels of a world-class store network. It is also surprisingly close to the cutting edge of retail technology these days. Ninety-four percent of American households can order stuff from Walmart and have it delivered the same day. Twenty-five percent of the company's fast deliveries are completed within 30 minutes of placing the order -- and customers choosing this delivery method spend more than twice as much per order.
NASDAQ: WMT
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The shipping system will grow more automated in the next few years, assisted by a consumer-facing artificial intelligence (AI) shopping assistant named Sparky. E-commerce sales are up by 26% over the last year while high-margin operations like advertising services and the Walmart+ shopping portal are boosting profit margins. Sam Walton's retail giant isn't as old-school as you might think.
Walmart's stock isn't exactly cheap after doubling in two years (while Kohl's traded sideways), but it seems worthy of a premium valuation. This industry giant is poised to continue growing and evolving for decades to come.
Amazon keeps finding new markets to dominate
Amazon is redefining delivery speed, despite a lack of big-box retail stores. The company recently deployed its millionth warehouse robot in the ultra-automated shipping system, and its drone-based deliveries took off in the spring of 2024. It's an asset-light system, too, as 62% of Amazon's items came from third-party sellers rather than Amazon's own inventory in the last year.
When Amazon expands its pharmacy services, as it did this week, that's enough to cut $620 million off sector giant CVS Health's market cap. That's just a small launch of vending machines in a few Los Angeles-area healthcare clinics. Imagine how a nationwide rollout of this convenient option could shake up the pharmacy industry.
And no opportunity is too small to matter. For example, Amazon is investing more than $1 billion to improve the shipping network in Belgium over the next three years. That's the 10th-largest economy in Europe with a gross domestic product (GDP) comparable to Colorado.
NASDAQ: AMZN
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North American sales rose 11% year over year in the second quarter while international retail revenue jumped 16%. And I haven't even hinted at Amazon's most profitable business yet -- the Amazon Web Services (AWS) cloud computing service that plays a leading role in the ongoing AI boom.
Sorry if I sound breathless. I'm just trying to convey Amazon's many advantages without repeating stuff you've heard a million times already. Yet, the stock trades at a lower P/E ratio than Walmart. That's kind of rare, making Amazon a prime value investment at the moment.
Target's temporary markdown could be your gain
Target is bouncing back from its own struggles, and unlike Kohl's, the Minnesota-based veteran has a clear path forward.
The company earned its playful "Tar-zhay" nickname by doing what Kohl's only dreams of: convincing shoppers that budget-friendly can still be stylish. The difference? Target actually delivers with 45+ store brands generating over $30 billion of annual sales.
Wall Street worries about Target's modest top-line growth right now, driving share prices 33% lower year to date. The 10.6 P/E ratio places this stock in the bargain bin, right next to Kohl's.
NYSE: TGT
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I find that ironic, given Target's upscale mass-market brand and rich profit margins. Incoming CEO Michael Fiddelke faces a tough task but seems ready for the job.
"I know we're not realizing our full potential right now," Fiddelke said in August's Q2 earnings call. "We're a retailer that believes that an elevated experience is every bit as important as product."
That's the secret sauce that lets Target charge slightly higher prices than Walmart or Kohl's, and people still show up to enjoy a better shopping experience. Turnaround efforts are never easy or guaranteed, but this is the bounce I would bet on in today's retail space.
