Target market cap losses hit $15.7 billion, shares approach 52-week low amid woke backlash
Target's decision to move Pride displays at some locations last month set off firestorm
Panelists Deroy Murdock and Liz Peek take a closer look at Targets funding of liberal groups on Kudlow.
Target’s market cap has fallen over $15.7 billion amid backlash to decisions surrounding LGBTQ Pride merchandise as the stock dropped another 0.4% on Monday.
Target’s market value was over $74 billion before the Pride displays made national news, as tracked by Dow Jones Market Data Group. The retailer initially irked conservatives with Pride displays that featured items such as assorted children’s apparel and "tuck-friendly" women's swimsuits, but some in the LGBTQ community also became outraged when the displays were dialed back ahead of Pride Month.
Shares fell to $126.48 when the market closed Monday after eclipsing $161 just last month. Three Wall Street firms have since downgraded the shares on concerns over slowing sales. Target shares are just shy of a 52-week low of $125.08.
A Target shopper leaves the store. (Bing Guan/Bloomberg via Getty Images / Getty Images)
Citi analyst Paul Lejuez lowered the stock on Friday to neutral from buy and pitted the troubled retailer against rival Walmart, which Lejuez said would begin gobbling up market share.
Considering the competitive landscape, "We believe Walmart is likely to continue gaining market share, and Target's high exposure to discretionary sales will not serve them well in the current macro backdrop," Lejuez said in a note.
"Despite the recent stock pressure, we cannot recommend investors buy the stock given these dynamics and now believe the risk, reward is more balanced, but risk is more to the downside near term," he continued.
Lejuez also highlighted Target's 13.9%-drop in store traffic the final week in May as inflationary pressures subdued consumer spending over Memorial Day weekend. This drop coincided with the Pride controversy making national news.
TARGET SHARES DOWNGRADED AGAIN ON SALES CONCERNS
Many Target locations across the country feature massive June Pride month displays on an annual basis. (Brian Flood/FOX Business)
Target Pride swimsuits boast "tuck-friendly construction" and "extra crotch coverage," presumably to accommodate male genitalia, even if they are made in an otherwise female style. (Brian Flood/FOX Business / Fox News)
Also last week, KeyBanc Capital Markets cut the retailer's shares to "sector weight" from "overweight" as the resumption of student loan payments stipulated by Congress' debt ceiling agreement poses a sizable headwind for discretionary spending for shoppers, which has an elevated discretionary sales mix and a younger, college-educated core consumer demographic.
JPMorgan Chase also downgraded Target's stock earlier this month, with analysts citing the possibility of a decline in sales due to consumers pulling back spending amid persistent inflation.
Target confirmed "adjustments" to the Pride merchandising plans were underway in May after Fox News Digital learned it rolled back displays at some of its locations. A Target insider told Fox News Digital that some southern stores were told by the corporation to move LGBTQ Pride merchandise away from the front of their locations after customer outrage to avoid a "Bud Light situation."
Target has said the displays were dialed back to protect employees against threats from angry customers.
Fox Business’ Joe Toppe contributed to this report.