Target shares were hit with another Wall Street downgrade following the company's Pride merchandise controversy, reported Fox Business.
Citi analyst Paul Lejuez in a new note downgraded his rating on Target to "neutral" from "buy."
"Considering the competitive landscape, we believe Walmart is likely to continue gaining market share [including from Target], and Target's high exposure to discretionary sales [55% of sales] will not serve them well in the current macro backdrop [which became more evident this earnings season]," Lejuez said.
He added: "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."
Target this season offered LGBTQ merchandise including female-style swimsuits with a "tuck" option for male genitalia and a "gender fluid" mug.
Target store traffic plunged 13.9% in the final week of May.
JPMorgan cut its rating on Target's stock on June 1.
"Target over-indexes to the millennial customer and, should student loan payments come back on, the company is more exposed than others in our coverage," JP Morgan analyst Chris Horvers said. "Buy-side client expectations are in the $6-8 million per month consumer outflow range should this happen, per our conversations, which represents a potential 1-2 point [comparable] headwind to retail spending."
Solange Reyner ✉
Solange Reyner is a writer and editor for Newsmax. She has more than 15 years in the journalism industry reporting and covering news, sports and politics.
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