×

Trading the consumer: 4 plays on retail headlines

CVS' acquisition of Target's pharmacy business should send both stocks shooting higher, CNBC "Fast Money" trader Pete Najarian said Monday.

The move announced Monday will help CVS—the second-largest U.S. drugstore operator—bargain with drugmakers for lower prices. It will take on Target's nearly 1,700 pharmacies.

"It seems to me they're making all the right kinds of decisions," Najarian said.

Read MoreWhat CVS-Target deal means for you

Getty Images

Markets, however, showed muted excitement for the deal. Target and CVS shares closed Monday 1.2 percent and 0.4 percent higher, respectively.

Trader Tim Seymour felt discount retailer Wal-Mart's stock looked more appealing than Target's on multiple factors, including valuation. WMT shares have fallen more than 16 percent this year.

Trader Guy Adami preferred Gap in the retail space. The stock rose more than 1 percent in extended trading after it announced it would close 175 namesake stores and cut about 250 jobs at its corporate headquarters.

Read MoreGap to close 175 stores and lay off 150 HQ workers

Disclosures:

TIM SEYMOUR

Tim Seymour is long AAPL, T, BAC, C, DIS, F, GE, GM, GOOGL, INTC and SUNE. Tim's firm is long BABA, BIDU, MCD, NKE, NOK, SBUX and YHOO.

PETE NAJARIAN

Long AMAT, AAPL, BABA, BAC, BMY, BP, CSX, DISCA, DKS, FOXA, GE, KKR, KO, LLY, MRK, PEP, PFE and TEVA. He is long calls AAL, ABX, BAC, BBY, BMY, C, COP, CSX, DAL, DE, ETFC, FCAU, GE, GS, INTC, INVN, JPM, LEN, MT, MU, NUAN, OC, PFE, RAD, S, SXC, SYY, UAL, USB, VOYA, VZ, WFM, WSM, XLF and ZIOP. Today he bought INVN calls.

DAN NATHAN

Dan is long CAT July/August put spread, SPY June put fly, TWTR, BBRY June calls, SO, DE June put fly, INTC July put, WMT June call fly, LVS July Aug put spread, TWTR SEPT call spread and GRRO June put fly. He is short SO Aug call.

GUY ADAMI

Guy Adami is long CELG, EXAS and INTC. Guy Adami's wife, Linda Snow, works at Merck.