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Target's stock, on its longest losing streak in 23 years, downgraded at JPMorgan

By James Rogers

Target is facing consumer pressures and the effects of recent controversies, JPMorgan says

Target Corp.'s stock, which is on its longest losing streak in 23 years, was downgraded to neutral from overweight Thursday by JPMorgan, which cited "too many concerns rising" in relation to the retail giant.

The stock ended Wednesday's session down 2.2%, marking its ninth straight decline and the stock's longest losing streak since an 11-day stretch that ended Feb. 24, 2000, according to Dow Jones data. Wednesday also marked the stock's lowest close since Aug. 11, 2020.

Target (TGT) shares fell 1.7% in premarket trading Thursday. The stock has fallen 12.2% in 2023, compared with the S&P 500's gain of 8.9%.

Related:Target's stock falls toward longest losing streak in 23 years

"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," wrote JPMorgan analyst Christopher Horvers. Disinflation in grocery is also continuing to accelerate, according to Horvers.

"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," wrote Horvers. "This could turn [Target's] traffic negative after an impressive run of 12 consecutive positive quarters."

Target has faced an intense anti-LGBTQ+ backlash against the company's Pride collection in recent weeks.

Related: Trans designer in Target anti-LGBTQ+ backlash says he was 'dealt the worst hand'

The company could also feel the impact when student-loan repayments resume. Under the terms of the deal to raise the debt limit, the pause in student-loan repayments will end by Aug. 30. "[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," wrote Horvers.

Of 35 analysts surveyed by FactSet, 20 have an overweight or buy rating and 15 have a hold rating for Target.

Additional reporting by Tomi Kilgore.

-James Rogers

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06-01-23 0919ET

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