JPMorgan downgrades Target's stock, cites 'consumer pressures and recent company controversies'

JPMorgan Chase, the largest bank in the United States, has downgraded Target's stock.

Analysts at the bank downgraded the retailer's stock from "overweight" to "neutral." This means that financial analysts were bullish on Target's stock, meaning they thought its share price was a good value compared to other stocks in its market. Generally speaking, "overweight" stocks are considered strong buys with valuable returns.

A "neutral" stock, then, is one that analysts believe is neither of good nor poor value.

JPMorgan analyst Christopher Horvers attributed the stock downgrade to market shifts and "recent company controversies."

"We continue to believe that the consumer is broadly weakening while the share of wallet shift away from goods (51% of [Target’s] sales) is ongoing," Horvers said, Market Watch reported.

"While still positive on a [three-year] basis, [Target] has been giving back share on a [one-year] view and we believe this share loss could accelerate into back to school and linger into holiday given consumer pressures and recent company controversies," Horvers explained. "This could turn [Target’s] traffic negative after an impressive run of 12 consecutive positive quarters."

Target became the target of backlash last month over an assortment of controversial products, including LGBTQ onesies, "tuck-friendly" bathing suits, drag queen books for children, and clothing promoting satanism.

Target eventually pulled some of the controversial products from its shelves and moved other controversial items to the rear of stores.

The retail giant's stock tumbled for nearly two weeks straight over the backlash. Some observers suggested Target may have faced the same fate as Bud Light. But on Thursday, Target finally snapped the streak of consecutive losing days on Wall Street.

Still, Target's stock has dropped 12% in 2023 despite the S&P 500 index making healthy gains.

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