Target Earnings Call Supports These 2 Holdings

As we digest earnings call comments from TJX Companies TJX and get ready for Wednesday afternoon’s events, which include Google's GOOGL Made by Google 2025 event in the afternoon and the latest Fed policy meeting minutes, we wanted to share comments that stood out to us from Target’s TGT earnings call earlier in the day:

"We've seen a consumer that had to be choiceful with their spend, who's seen inflationary pressure across their household spending. And we know that that can lead to a pullback in some of the discretionary categories and the discretionary spending.

"…we're continuing to negotiate with our partners to ensure that we're offering everyday good value to the consumer. What we've said and it continues to be our position is that we'll take price as a last resort. But our commitment is to offer everyday good value and to have competitive pricing.

"As we think about going forward, what I would just say is value is very top of mind for consumers right now. They're looking to stretch their budget. They're looking to navigate inflation and uncertainty around tariffs. So, value is very top of mind and we will continue to offer great value in the form of deals and promos and price, but also consumers are thinking about value much more broadly than that. They're thinking about it as quality and style and trend."

That reaffirms in our view that consumers are being increasingly selective with their spending, trading down where they can. In that environment, we continue to see TJX and Costco COST benefitting.

We’ll be discussing our post-earnings TJX thoughts in a standalone alert before too long.

Google’s Made by Google Event

Last month, Samsung SSNLF held its Unpacked event that debuted its latest foldable smartphone, one that has been doing rather well in the market. On Wednesday, Google showcased its latest line of Pixel smartphones, ones that prominently feature the company’s Gemini AI assistant. The Pixel 10 series include:

The baseline model, the Pixel 10, starts at $799 and is available in several colors
A more powerful Pixel 10 Pro starts at $999
The Pixel 10 Pro XL with a larger screen and 256 GB of base storage starts at $1,199

Google is also releasing an updated version of its folding phone, the Pixel 10 Pro Fold, that starts at $1,799.

We expect the event will showcase new Gemini features and capabilities, ones that will support our view that AI adoption will drive network congestion, spurring capital spending levels. We’ll also be interested in how Google presents the Pixel 10 Pro Fold as a smartphone productivity enhancer, tablet replacement or both. Granted, based on shipped units, Google’s not a major player in the smartphone market, but all of its models are expected to sport organic light-emitting diode displays. Another indication that the conversion to that display technology is accelerating. For us, that's positive reinforcement behind our position in One-rated Universal Display OLED.

Fed Meeting Minutes

At 2 p.m. ET, the Fed will release its last policy meeting minutes but given what we saw in last week’s inflation data — July Core CPI, July PPI and July Import Prices — what we learn will be somewhat dated information. What we will be interested in is the conversation around what it would take for the Fed to contemplate rate cuts and to what degree current monetary policy is viewed as overly restrictive.

Ahead of Thursday morning’s Flash August PMI report from S&P Global (SPGI), comments from Home Depot HD and other retailers about incremental pricing action due to tariffs suggest pricing data will remain elevated.

To that, the Trump administration has added 407 product categories to the list of “derivative” steel and aluminum goods covered by Section 232 tariffs, making their steel and aluminum content subject to a 50% duty. The action applies to a wide range of items, including wind turbines and parts, mobile cranes, bulldozers and other heavy machinery, railcars, furniture, compressors, pumps, and hundreds of other products.

Tariffs were also extended for imported parts for automotive exhaust systems, electrical steel for electric vehicles, and components for buses, air conditioners and household appliances such as refrigerators, freezers and dryers.

More Pro Portfolio

At the time of publication, TheStreet Pro Portfolio was long TJX, GOOGL, COST and OLED.