Argus' Top 5 Retail Stocks Heading Into The Holidays

In its September research conference call, Argus shared a look into the retail sector as kids return to school and the holiday season starts to lean out. The analysts recommended five retail names that they consider to be best-in-class companies with models that insulate them from e-commerce.

Top 5

1. Home Depot Inc HD: A $154 target price implies an upside of more than 18 percent from current valuations. Argus Director of Research Jim Kelleher explained that Home Depot is not very vulnerable to e-commerce, since its customers go in to buy “a few sticks of lumber, or a few pieces of wallboard or sheet rock.”

2. Lowe's Companies, Inc. LOW: A $90 price target means the stock could surge by more than 21 percent, largely helped by appliances, as Sears Holdings Corp SHLD’ market share falls, Argus Senior Retail Analyst Chris Graja explicated.

Related Link: Argus On Retail, "We Think It's Going To Be A Good Christmas"

3. Kroger Co KR: "Spinach and hamburger meat have also been a little bit Internet resistant,” Argus analysts continued, issuing a $43 target price on Kroger, which implies a potential return of roughly 28.4 percent from current price points.

4. CVS Health Corp CVS: Analysts at Argus see CVS hitting $120, up 25 percent from current valuations. "They've got a big PBM (pharmacy benefit manager) that's able to leverage expenses, take advantage of all the information technology, they've got innovations in things like 90-day prescriptions and monitoring of health conditions,” the experts added.

5. Costco Wholesale Corporation COST: Costco is seen by Argus analysts as the only U.S. retailer that’s “truly a success internationally.” The $175 target price entails an increase of almost 14 percent from current valuations.

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Disclosure: Javier Hasse holds no interest in any of the securities or entities mentioned above.