Target faces more backlash as Bank of America slashes prices

Diminishing foot traffic at Target, following their display of transgender merchandise has caused Bank of America to lower their price target.

Ever since Target brought out its transgender merchandise, it has received an ample amount of pushback. This has unfortunately led to a three-year low in stock prices as they deal with downgrades.

On Wednesday, Bank of America hit the shareholders with yet another demotion. The price objective was lowered from $180 to $145 by the bank, which explained that the reduction was a result of slowing traffic, meek mobile app engagement, and declining peer multiples.

When the controversy around transgender merchandise hit Target’s market value in the middle of May, Target lost a total of $15 billion in a single go. Since then, Target has managed to recover $61 billion as of Wednesday from last month’s $74 billion high.

Robert Ohmes, an analyst at Bank of America, stated in a report that the gross margin pressures from labor costs, investments, and the swift expansion of the lower-margin e-commerce channel, as well as ferocious competition from competitors, pose downside risks to their price objective.

Last week, Citi analyst Paul Lejuez downgraded the stock from buy to neutral and compared the struggling retailer to rival Walmart, which Lejuez predicted would start stealing market share.

JPMorgan Chase also downgraded Target's stock on June 1; analysts cited the potential for a drop in sales as a result of consumers cutting back on spending amid ongoing inflation.