Target faces more headwinds; Bank of America slashes price target
Target's ‘diminishing foot traffic, modest APP engagement to blame,’ analyst
How will Target's woke policies impact the company?
Panelists Deroy Murdock and Liz Peek take a closer look at Target's funding of liberal groups on 'Kudlow.'
Target, which has been struggling with pushback over transgender merchandise, is also dealing with downgrades that have pushed its stock price to a three-year low.
Shareholders were hit with another demotion from Bank of America Wednesday.
The bank lowered its price objective from $180 to $145 while saying the reduction is a response to weakened peer multiples, decelerating traffic and modest mobile app engagement.
Since mid-May, when the controversy hit Target's market value, Target had lost over $15 billion at one point. As of Wednesday, it recovered slightly to $61 billion from the high of $74 billion last month.
CONSUMERS 'CREEPED OUT' BY TARGET'S TUCK FRIENDLY SWIMWEAR
Target
"Downside risks to our price objective are gross margin pressures from labor costs, investments and the rapid growth of the lower-margin e-commerce channel as well as aggressive competition from competitors," Bank of America analyst Robert Ohmes wrote in the report.
TARGET MARKET CAP LOSSES HIT $15.7 BILLION; SHARES APPROACH 52-WEEK LOW AMID WOKE BACKLASH
A customer places shopping bags inside the trunk of a vehicle in the parking lot of a Target store in Emeryville, Calif. March 1, 2021. (David Paul Morris/Bloomberg via Getty Images / Getty Images)
TARGET SHARES DOWNGRADED AGAIN ON SALES CONCERNS
Last week, Citi analyst Paul Lejuez lowered the stock to neutral from buy and pitted the troubled retailer against rival Walmart, which Lejuez said in a note would begin gobbling up market share.
Meanwhile, KeyBanc Capital Markets cut the retailer's shares June 5, to "sector weight" from "overweight" as the resumption of student loan payments stipulated by Congress' debt ceiling agreement posed a sizable headwind for the discretionary spending of shoppers.
On June 1, JPMorgan Chase downgraded Target's stock, with analysts citing the possibility of a decline in sales due to consumers pulling back spending amid persistent inflation.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TGT | TARGET CORP. | 130.73 | -1.66 | -1.25% |
| WMT | WALMART INC. | 92.64 | +0.14 | +0.15% |
The retailer initially irked conservatives with Pride displays that featured items such as assorted children’s apparel and "tuck-friendly" women's swimsuits. The move sparked employee safety issues at select stores, as first reported by Fox News Digital.
AMAZON, TARGET MODIFY DELIVERIES IN AREAS WITH POOR AIR QUALITY
Additionally, some in the LGBTQ community became outraged when the displays were dialed back ahead of Pride Month.
Target's Pride adult swimsuit features "tuck-friendly construction" and "extra crotch coverage." (Brian Flood/FOX Business / Fox News)
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Fox News Digital's Brian Flood contributed to this report.