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| Ticker | Name | Date | Analyst Firm | Up/Down | Target ($) | Rating Change | Rating Current |
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Target Corp (NYSE:TGT) and TJX Companies Inc (NYSE:TJX) are telling two very different stories about the American consumer, and ETFs tied to the retail sector are increasingly reflecting that split.
Target began its latest earnings day on Wednesday with another downbeat message: profit guidance cut, shrinking discretionary sales, weaker transactions, and a cautious holiday outlook as households juggle the rising costs of food, rent, healthcare, and everyday essentials. Its shares slipped in premarket trading and remain down roughly 35% for the year, keeping analysts primarily in the Neutral-to-Sell camp.
Meanwhile, TJX raised its annual profit outlook in the wake of solid store traffic, stronger fall and back-to-school apparel demand, and resilient demand for discounted goods. Shares are up about 21% year to date, extending a multi-quarter streak where off-price retail has outperformed big-box peers.
That divergence is now echoing through the ETF landscape. While Target may dominate headlines, it hardly moves the needle inside most retail and consumer discretionary ETFs. The stock typically sits at fractional weightings, often well below 1%, meaning its slump hasn’t materially dragged on fund performance.
By comparison, TJX carries meaningful exposure in the 1.5% to 5% range across many of the same funds, giving ETFs a subtle but consistent lift from the off-price retailer’s strength.
In the VanEck Retail ETF (NASDAQ:RTH), TJX holds comfortably more than 5% of the weight among heavyweights like Amazon Inc (NASDAQ:AMZN) and Walmart Inc (NYSE:WMT).
The SPDR S&P Retail ETF (NYSE:XRT) treats all retailers equally, and TJX’s outperformance has become a mild tailwind.
The Consumer Discretionary Select Sector SPDR Fund (NYSE:XLY) barely holds Target at all, but does have a much more significant TJX position (4%+).
That natural weighting advantage doesn’t drive the whole ETF narrative, but it reinforces what investors already believe: the market sees off-price retail as a safer bet than the middle-income discretionary model struggling at Target.
The latest Placer.ai data shows that Target’s foot traffic fell 2.7% year over year in Q3, with only a modest rebound in October as early holiday promotions kicked off. But TJX is moving in the opposite direction, logging 9.6% foot-traffic growth at HomeGoods and 8.1% at its Marmaxx chains. That’s a rare bright spot in a sector defined by cautious spending.
Tariffs are widening the performance gap further. TJX’s flexible sourcing model enables it to replenish inventory opportunistically and sidestep tariff-driven costs.
Target, meanwhile, has higher tariff exposure-a margin risk Bank of America’s Robert Ohmes highlighted as part of his Underperform rating. With digital sales growth now slowing and merchandising challenges mounting, analysts see increasing longer-term sales and margin risks for Target relative to off-price peers.
Incoming CEO Michael Fiddelke insists there's a path to win "regardless of how the macro environment evolves," and Target plans to boost capital spending by 25% in 2026 to overhaul stores and sharpen merchandising.
With consumers shifting decisively toward value — and foot traffic making that trend unmistakable — ETFs seem comfortable leaning into their built-in tilt toward TJX, the retailer benefiting from the trade-down wave, rather than Target, which is still trying to outrun it. For now, the ETF market's message is straightforward: off-price is winning, Target is wobbling, and fund weightings suggest investors already know it.
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Photo by Sean Wandzilak via Shutterstock
