As Trump Tariffs Arrive, Companies Brace For More Uncertainty

By Ian Salisbury

In a topsy-turvy market, hedge funds appear to be betting blue chips like Walmart, Philip Morris, and Amazon can keep delivering solid returns, while punishing clean energy bets such Enphase Energy and Albemarle.

The names are all on a list of least and most shorted stocks by hedge funds, published by BoA Securities on Monday. Bank of America compiled the list by measuring short interest, the total value of bearish bets placed by hedge funds, against the stocks' float, a measure of the total value of the company's shares available to be purchased on the open market.

Investors have embraced staples stocks in 2025, and while the U.S. economy remains fundamentally solid, consumer sentiment has been slipping. The Consumer Staples Select Sector SPDR ETF has returned 5.7% so far this year, handily beating the 1.2% return of S&P 500.

The Bank of America survey revealed Walmart was the market's least-bet-against stock with short interest representing just 0.45% of Walmart's float. Philip Morris, Mastercard, Amazon, and Chubb rounded out the top five, all with short interest well under 1%.

Walmart, known for its 'everyday low prices' tends to hold up well when consumers are skittish. The retailer's shares are up 9.2% this year, but it isn't all roses. The stock dropped more than 6% after reporting fourth-quarter earnings last month thanks to a weaker-than-expected outlook — although the shares have since regained much of the lost ground.

Walmart's fast-growing online marketplace should help it improve margins and capture an even bigger share of the U.S. retail market, wrote CFRA analyst Arun Sundaram in a note Saturday.

Walmart "has always been known for its everyday value, but is starting to become more known for its quality and convenience," wrote Sundaram, who has a 'Buy' rating on the stock. His $114 price target is about 16% above today's price of $98.

The stock hedge fund managers are betting against most is solar company Enphase Energy, with short interest of more than 16.7%. That's followed by Super Micro Computer, Albermarle, which produces lithium for EV batteries, Fox Corp., and drug company Moderna, all with short interest of more than 10%. (Fox Corp. and Barron's parent company News Corp share common ownership.)

It's no surprise investors would be down on solar. The industry has faced a double whammy from inexpensive Chinese technology and high interest rates, which make it more difficult for consumers to finance solar installations. Enphase didn't immediately respond to a request for comment.

"As [the] U.S. market only slow[ly] recovers and elevated competition in E.U. continues, we believe it still takes time for ENPH to return to normalized growth trajectory," wrote Truist analyst Jordan Levy, following the company's latest earnings report last month.

Still, he isn't necessarily bearish on the stock. He rates it a 'Hold' and maintains a $65 price target, about 18% above the current price of $55.

Write to Ian Salisbury at ian.salisbury@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

Dollar General is navigating mounting competitive and pricing pressures, with limited opportunity for top-line improvement, Deutsche Bank said in a note emailed Monday.

The brokerage downgraded the stock to hold from buy, citing "still challenging fundamentals and intensifying competition," Deutsche Bank analyst Krisztina Katai said.

"Top-line performance remains soft with limited opportunity for improvement, and we think the company's lagging e-commerce presence is a growing concern," Katai wrote.

Dollar General is scheduled to report fiscal fourth-quarter results on March 13. Analysts polled by FactSet are modeling for revenue of $10.26 billion and earnings per share of $1.51 through the three-month period that included the critical holiday season. Last year, the company reported fourth-quarter revenue of $9.86 billion and EPS of $1.83, both down year to year.

The company faces margin headwinds through at least 2025, according to the Deutsche Bank report. However, it sees a favorable risk-reward balance at Dollar Tree .

The brokerage prefers retailers such as Walmart and Costco that offer both value and convenience.

"Consumer retail entered 2025 navigating a complex landscape and retail earnings season has been a volatile one," according to Deutsche Bank. Within the retailers reporting over the next two weeks, Costco is the brokerage's top pick. The warehouse chain last month said that US comparable sales climbed 9.2% in January year over year.

The brokerage sees "limited upside" for Target with muted top-line performance and margin pressures that are expected to build amid competition from companies like Walmart, Costco and Amazon , Katai said.

Monster Beverage has an average rating of overweight and mean price target of $56.58, according to analysts polled by FactSet.