Already near a three-year low, Target shares have been hit with a series of downgrades as consumer pushback on the retailer’s Pride merchandise continues.
Target’s stock value has fallen roughly 3.1% in the last five days, after plummeting around 18.5% the last month. The retailer's market valuation has tumbled by nearly $15 billion since the controversy began, now sitting at $59.1 billion down from $74 billion, as of Friday.
The retailer, which has supported LGBTQ Pride for years, this season offered merchandise that included female-style swimsuits that have the option to "tuck" male genitalia. Other products were labeled as "Thoughtfully fit on multiple body types and gender expressions," a "Gender Fluid" mug and a variety of adult clothing with slogans such as "Super Queer" among other items.
Now, the company’s latest snub comes as Citi analyst Paul Lejuez lowers the stock to neutral from buy and pits the troubled retailer against rival Walmart, which Lejuez said in a note on Friday 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 the 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.
On Monday, 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.
Last week, JPMorgan Chase also downgraded Target's stock, with analysts citing the possibility of a decline in sales due to consumers pulling back spending amid persistent inflation.