{"id":40879,"date":"2023-07-26T18:40:35","date_gmt":"2023-07-26T22:40:35","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/target-stock-gets-a-double-downgrade-3-reasons-why\/"},"modified":"2023-07-26T18:40:37","modified_gmt":"2023-07-26T22:40:37","slug":"target-stock-gets-a-double-downgrade-3-reasons-why","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=40879","title":{"rendered":"Target Stock Gets a Double Downgrade. 3 Reasons Why."},"content":{"rendered":"
\n
<\/p>\n
<\/p>\n<\/figure><\/div>\n

Target stock has been in the crosshairs this year, and one analyst is bracing for more bad news when the big-box retailer reports earnings next month. <\/p>\n

On Wednesday, Raymond James analyst Bobby Griffin cut his rating on Target (ticker: TGT) by two notches, to Market Perform from Strong Buy. His double downgrade means bulls no longer have the majority, with half of analysts sidelined on the shares. <\/p>\n

\n

In midday trading, the stock was up 0.4%, to $134.15; it is down 14% in the past three months. The broader market was mixed ahead of the Federal Reserve\u2019s decision on interest rates.<\/p>\n

Griffin also removed his $199 price target and lowered his earnings per-share estimate for the fiscal second quarter to $1.15 from $1.45, and his full-year estimate to $71.5 from $7.85. Consensus calls for $1.57 and $8.16, respectively.<\/p>\n

Target is slated to release its fiscal second-quarter numbers on Aug. 16.<\/p>\n

Griffin gave three main reasons for his increased caution. First, he believes sales and traffic have remained weak, and trends \u201csuggest Target is losing topline momentum.\u201d<\/p>\n

Secondly, he is concerned that Target\u2019s long-awaited margin recovery may now be even further in the future: Lackluster discretionary sales, a key category, could force the company to once again offer deeper discounts to move merchandise.<\/p>\n

Finally, Griffin thinks the continuing problem of organized crime leading a rise in shoplifting remains a \u201cwildcard.\u201d During first-quarter reporting season, Target warned that \u201cviolent incidents\u201d were increasing, and could lead to a half-billion-dollar hit to profitability for the year. Many other retailers noted theft was also a problem.<\/p>\n

Ultimately, Griffin believes Target\u2019s long-term appeal remains, but has \u201clower confidence in near-term sales trends and profit recovery.\u201d He simply doesn\u2019t think the shares are a Buy, even as they hover not far off their 52-week lows.<\/p>\n

Griffin\u2019s rating cut means that 17 of the 35 analysts tracked by
\n FactSet
\n are bullish on Target, down from two-thirds a year ago. The average analyst price target has also come down to $171, although that is still nearly 30% above where shares sit now.<\/p>\n

Target received two other downgrades last month, from
\n Citigroup
\n and
\n JPMorgan.<\/span>
\n Those firms are also concerned about the company\u2019s sales trajectory.<\/p>\n

Write to Teresa Rivas at teresa.rivas@barrons.com<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Target stock has been in the crosshairs this year, and one analyst is bracing for more bad news when the big-box retailer reports earnings next month. On Wednesday, Raymond James analyst Bobby Griffin cut his rating on Target (ticker: TGT) by two notches, to Market Perform from Strong Buy. His double downgrade means bulls no […]<\/p>\n","protected":false},"author":1,"featured_media":40880,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-40879","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nTarget Stock Gets a Double Downgrade. 3 Reasons Why. | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Target stock has been in the crosshairs this year, and one analyst is bracing for more bad news when the big-box retailer reports earnings next month. 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