Target Loses $14B in Value Amidst Pride Merchandise Backlash — Retail Bum

Target has lost nearly $14 billion in market value since reporting its earnings last month, with its stock dropping for a ninth session straight — the most prolonged downturn the company has experienced since February 2020.

The decline in Target’s stock value has resulted in the company’s valuation tanking to its lowest level in over six months, prompting JPMorgan Chase & Co. to downgrade Target’s rating from overweight to neutral.

“The company was already losing market share, and we fear that these headwinds might not abate as we look to the back-to-school and holiday seasons in the second half,” said JPMorgan analyst Christopher

While Target’s troubles initially stemmed from a slowdown in spending, its sales have recently been impacted by continued criticism from conservative voices for selling Pride merchandise in its physical stores. In response to the controversy, the company has removed some of its merchandise but is still facing an incremental decline in foot traffic, which is impacting sales.

“Traffic has been a key bright spot for Target as it struggled with margin issues, and a slowdown would be negative,” said Wells Fargo & Co. analyst Edward Kelly. “It remains to be seen how long any impact would last.”

Looking ahead, analysts expect Target’s average share price to improve by 30% to $177, which would still be below the record high of $266.39 the company observed in November 2021.

Photo credit: Target

Originally published at https://retailbum.com on June 5, 2023.