The K-shaped economy has winning stocks on both ends of the K. The upper arm of the K includes the high-end, luxury consumer companies that appeal to the wealthy. This segment of the consumer sector has benefited as the stock market has risen and home values have increased over the past five years. The lower leg of the K also has produced winners. The mass consumers, supported by a low unemployment rate, continue to prove their resilience despite the challenges of inflation and affordability. Even so, all consumers are watching wallets closely and choosing wisely how to direct their spending. For this week's list, we look at BUY-rated stocks that we see as winners of the K-shaped economy. The price performance noted is year to date.

The first-quarter earnings season has been sensational. Many companies knocked it out of the park when delivering earnings and revenue numbers that well beyond expectations. With reports now in from about 96% of S&P 500 companies, earnings have climbed a staggering 29% from last quarter. Information Technology, up 56%, and Communication Services, up 51%, have led the pack. At the bottom are Healthcare, down 3%, and Energy, down 1%. With earnings season essentially over, we have had a chance to look at trends. In particular, we watch for companies that raised guidance as we view that action as a likely catalyst for market-beating returns in the quarters ahead. It's even harder for companies to raise guidance during uncertain economic times, as vision is murky. The following is a partial list of companies in Argus' Fundamental Universe of Coverage where management raised its outlook during the 1Q26 reporting season.

Target Corp. is the second-biggest U.S. discount retailer. It differentiates itself by selling stylish products at reasonable prices. The company has partnerships with an evolving group of designers. Based in Minneapolis, Target ended FY26 with 1,995 stores in the U.S., with a total of 251 million square feet. Target sold its in-store pharmacies to CVS Health Corp. in December 2015. For the fiscal year ended January 31, 2026, the company had total revenues of $104.8 billion, including more than $30 billion from Target's own brands. Sales originated on Target.com represented about 20.6% of the total in FY26, up from 19.6% a year earlier and 8.8% in prepandemic FY20. The company's fiscal year ends on the Saturday closest to January 31. Approximately 30% of merchandise sales came from beauty and household essentials, 15% from hardlines, 15% from apparel and accessories, 15% from home products, and 23% from food. In addition, the company had $915 million of Advertising revenue, $522 million of credit card profit sharing and $626 million of 'Other.' Target was moved to the Consumer Staples sector from Consumer Discretionary in 2023.

Stocks were in the red for much of the day on Thursday, with but reversed course and closed higher on hopes for an end to the war in Iran. The Dow Jones Industrial Average was up 0.55%, the S&P 500 0.17%, and the Nasdaq Composite 0.09%.