Just Wednesday, Target's (TGT) quarterly results were good enough for Wall Street. Wal-Mart's (WMT) results Thursday, however, were not.

Net income rose 5.7% to $4.02 billion, or $1.18 per share, versus $3.8 billion, or $1.09 per share, a year earlier. Gains in the U.S. and overseas boosted quarterly sales by 4.5% to $113.5 billion. Wall Street analysts had expected the world's largest retailer to earn $1.17 a share on revenue of $115.75 billion.

Shares, which have jumped about 25% this year, were down in early trading. The stock, for now, appears to be fully valued. It is trading at a price-to-earnings multiple near its five year high of 16.06, according to Reuters. The average 52-week target price for the shares is $74, which is about where it trades now. Unlike with Target, investors found little reason for excitement in Wal-Mart's quarter.

The company's U.S. operations, which have long been a concern to investors, had a mediocre quarter. Sales at established Wal-Mart U.S. stores, a key metric, rose 2.2% excluding fuel, an improvement over the 0.9% decline from a year earlier. However, that's slower than the 2.6% growth seen in the first quarter. Target's comparable-store sales, however, gained 3.1% during that same period, while same-store sales at off-brand retailer TJX (TJX) spiked 8% in July.

Operating income in Wal-Mart's U.S. stores jumped 5.3% to $5.25 billion, while overall sales excluding fuel rose 3.8% to $67.4 billion. Sam's Club had a profit of $536 million, up more than 10%, while sales at the warehouse retailer increased by 3.8% to $14.16 billion.

Net sales excluding fuel rose 6.4% to $32 billion at Wal-Mart International. Excluding the impact of currencies, sales would have risen 7.2%. Operating income at the business jumped 5.4% to $1.48 billion. These results were not bad, considering how heavily invested Wal-Mart is in Europe, where the economy continues to be a basket case. Of course, the bribery scandal in Mexico continues to weigh on the stock.

Wal-Mart, though, sees some reason for optimism. The company expects full-year earnings of $4.83 to $4.93 per share, an improvement over an earlier projection of $4.72 to $4.92 per share. Earnings for the third quarter will be between $1.04 to $1.09 per share. Wall Street expects the retailer to earn $1.05 per share in the current quarter and $4.93 per share for the year.

Heading into the important holiday season, consumers can expect even more Wal-Mart bargains than usual, which will ease the burden on family budget while squeezing profit margins. Investors looking at retail stocks should avoid this one for now.

Jonathan Berr is long Wal-Mart and Target. Follow him on Twitter@jdberr.