Key Points
-
Target is making its way back from sales declines and has large future expansion potential.
-
MercadoLibre and e.l.f. stock are down, but they have robust long-term opportunities.
-
Dutch Bros and On are young brands that are in high-growth territory.
-
As the market gets closer to ending the year with its fourth consecutive double-digit gain, the S&P 500 is actually down over the past month. There are worries about skyrocketing artificial intelligence (AI) spending, higher interest rates that could slow the economy, and unrelenting inflation that could start giving more consumers pause.
All economies and markets go through cycles, which is why it’s so important to have a long-term investing mindset. Trying to time the market can lead to poor timing and losses, while study after study has shown that it’s time in, not timing, the market that drives wealth generation.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. Continue »
Here are five stocks with excellent long-term prospects that I believe can lead to fabulous wealth creation if you hold on for the next 10 years.
1. Target
I debated which large-scale retailer to put on this list, because Costco Wholesale, Walmart, and Target (NYSE: TGT) each offer value for investors. However, the former two stocks are quite expensive right now, which is why Target, trading at a forward P/E ratio of 16, looks like the bargain to buy right now.
Target has been through a lot over the past few years, and it’s shown up in lower comparable sales and profits. Target stock is still 42% off its high, but it’s made a comeback this year, up 58%.
The market is celebrating the company’s wins this year, including a 3.8% increase in comparable sales in the 2026 fiscal second quarter (ended Aug. 1) and earnings per share of $4.11, up from $2.05 last year.
I believe Target can recover and go on to bigger and better things. It’s much smaller than Walmart and only U.S.-based, which provides ample expansion opportunities, and it has faced similar challenges before and bounced back. It was way ahead of Costco and Walmart in e-commerce adoption, and it’s likely to embrace new technology.
Finally, it’s a Dividend King, and it has raised its dividend for the past 54 years, which is passive income you can rely on.
2. Dutch Bros
Dutch Bros (NYSE: BROS) is a small coffee shop chain that’s expanding quickly. Customers love its exclusive custom beverages that lean toward the cold and the sweet, differentiating it from the standard coffee shop chain. Its portfolio consists predominantly of drive-thru locations, and it’s focused on quick, friendly customer service, which matters to today’s consumers.
The company consistently demonstrates robust growth, backed up by new stores and increased same-store sales. Total revenue was up 32% year over year in the second quarter, and same-store sales were up 5.8.%. It’s also highly profitable, and earnings are rising as the company scales.
Dutch Bros has 1,225 stores as of the end of the second quarter, but it plans to nearly double by 2029. It sees a long-term opportunity of 7,000 stores, and in 10 years it could reach that goal.
3. MercadoLibre
MercadoLibre (NASDAQ: MELI) has a dual ecosystem including the largest e-commerce platform in Latin America and one of the largest and fastest-growing finance apps. It has a major edge in the ecosystem aspect, keeping customers more engaged on the platform.
The company consistently boasts high growth, with a 50% year-over-year sales increase in the second quarter, its highest in nearly four years. There’s momentum across the platform, with a 44% increase in gross merchandise volume, a 14% increase in units per buyer (despite a 26% increase in active buyers), and a 56% increase in total payment volume.
Management feels it has many levers to pull to generate higher growth, and it keeps bringing out improvements and new features. It has a membership program called Meli+ that includes streaming subscriptions, and it recently lowered its free shipping threshold in its largest market, Brazil, which has led to accelerating growth there.
MercadoLibre stock was down 19% this year due to falling profits that it says are necessary to invest in future growth, and it looks like a stock to buy on the dip.
4. e.l.f. Beauty
e.l.f. Beauty (NYSE: ELF) is a young mass cosmetics and skincare company that has soared to the top of the industry. The brand, which stands for eyes, lips, face, is demonstrating fantastic growth, and it has continued to introduce new products and lines that captivate its core clientele of fun-loving, eco-conscious consumers.
It also recently entered the luxury market with its acquisition of Rhode, a great sign of what the company can do to generate higher growth.
In the 2027 fiscal first quarter (ended June 30), sales increased 36% year over year. e.l.f. is focused on value, and for a long time it priced all of its products at $1. It has since raised prices to offset higher costs, but it’s still a magnet for beauty customers as inflation makes it harder to spend money.
The company was battered by higher tariffs last year, but it’s since absorbed the impact, and its margins are improving; gross margin was 83% in the first quarter, 14% percentage points higher than last year.
e.l.f. stock is 49% off its high, but it’s up 47% year-to-date, and it’s a great time to catch it on the way up.
5. On
On Holding (NYSE: ONON) is a newcomer to the athletic-wear industry, and it’s quickly capturing market share, becoming the shoe of choice for its affluent client base.
The Swiss company has been growing fast despite the challenging economy and expanding its presence across the globe. While competitors like Nike and Lululemon Athletica have struggled, On has reported strong growth and profits.
Image source: On.
In the second quarter, sales increased 22% (currency-neutral) year over year and gross margin improved from 61.5% to 65.4%. That’s because the company’s premium positioning allows it to charge higher prices, and more customers are willing to pay full price.
The market liked its recent investor day update, when management said it expects high-teens growth through 2029 and a gross margin of at least 65%.
On stock is down 27% year-to-date, but at 16 times next year’s earnings, now is a good time to buy.
Should you buy stock in Target right now?
Before you buy stock in Target, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Target wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $336,195!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,241,567!*
Now, it’s worth noting Stock Advisor’s total average return is 875% — a market-crushing outperformance compared to 208% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of November 4, 2026.
Jennifer Saibil has positions in Dutch Bros, MercadoLibre, On Holding, and Walmart. The Motley Fool has positions in and recommends Costco Wholesale, Dutch Bros, MercadoLibre, Nike, On Holding, Target, and Walmart. The Motley Fool recommends Lululemon Athletica Inc. and e.l.f. Beauty. The Motley Fool has a disclosure policy.
