Target’s Stock Downgraded by JPMorgan Analyst Amid Backlash

Target’s Stock Downgraded by JPMorgan Analyst Amid Backlash
People shop at a Target store in Chicago, Ill., on Nov. 25, 2022. (Jim Vondruska/Reuters)
Jack Phillips

Target Corporation's stock was downgraded to neutral from overweight Thursday by JPMorgan, which cited "too many concerns" with the retail giant.

Over the past 30 days, Target's stock dropped some 18 percent amid calls for a backlash against the chain in connection to its decision to sell LGBT-themed items and clothes, including onesies for children and books instructing kids to use transgender pronouns. A number of social media users, starting in May, called on others to boycott the company.

“We continue to believe that the consumer is broadly weakening while the share of wallet shifts away from goods (51 percent of [Target’s] sales) is ongoing,” wrote JPMorgan analyst Christopher Horvers, reported by MarketWatch. As a result, Horvers downgraded the stock.

“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,” he wrote. “This could turn [Target’s] traffic negative after an impressive run of 12 consecutive positive quarters.”

And Target could also suffer when student-loan payments are slated to resume, a plan that was announced under the recent House-passed deal to raise the debt ceiling, Horvers wrote. Reports indicated that a pause on student loan payments would end by Aug. 30.

Target, he wrote, "over-indexes to the millennial customer and, should student loan payments come back on, the company is more exposed than others in our coverage,” according to the MarketWatch report.

According to MarketWatch, Target's stock is on its longest losing streak in over 20 years. Shares of Target extended their fall on Thursday, declining 2 percent in morning trading.

Target's decision to remove some "pride" products came weeks after brewer Anheuser-Busch's decision to produce a Bud Light can with transgender influencer Dylan Mulvaney's face drew widespread backlash on social media. Industry data shows that Bud Light has seen multiple weeks of sales declines in the midst of the boycott.

Other firms, including PetSmart and Kohl's, have also taken flack from conservative commentators over selling Pride Month merchandise, including pro-LGBT slogans. This week, Chick-fil-A, a company that often cites the Christian faith as inspiration, drew backlash when it was discovered that it had hired an executive in charge of "diversity, equity, and inclusion."

Bud Light is still dealing with the fallout over the beer can, which Mulvaney displayed in an Instagram post, igniting backlash. Bud Light’s parent company is tripling its U.S. marketing spending this summer as it tries to restore lost sales, while its CEO, Michel Doukeris, claimed that only "one can" was produced with Mulvaney's face.

In Florida, Disney has been engaged in a legal battle with Gov. Ron DeSantis since expressing opposition to the state’s classroom limits on discussing gender identity and sexual orientation. The massive media conglomerate has also faced boycott calls in recent years.

 Pride Month merchandise is displayed at the front of a Target store in Hackensack, N.J., on May 24, 2023. (AP Photo/Seth Wenig)
Pride Month merchandise is displayed at the front of a Target store in Hackensack, N.J., on May 24, 2023. (AP Photo/Seth Wenig)

Recent Actions

Target, meanwhile, confirmed it is removing some LGBT-themed merchandise after customer backlash last month, although the firm has sold "Pride Month" items in the previous year.  But several days ago, the big-box chain removed a number of LGBT-related products and claimed there was an increase in confrontations between customers and employees.

In a statement last week, the Minneapolis-based firm said that due to "volatile circumstances" in its stores, it was removing items at the center of the "most significant confrontational behavior." The company did not elaborate, and it isn't clear whether any police reports were filed.

Target, which has been selling such merchandise for over a decade, hasn't yet confirmed what items are being removed. In 2016, courted controversy when it released a policy to allow men to use women's bathrooms, drawing the ire of Christian groups, and two years later, the company faced a boycott when a man reportedly exposed himself to a girl in a Target women's bathroom.
In the meantime, some LGBT groups have lashed out at Target for removing the items last month. A GLAAD spokesperson accused the company of bowing to a "small group of extremists" and cast the move as a trend in which LGBT people "are being attacked with threats and violence like never before.”

However, conservative influencers who called for boycotts have argued that such groups are going after children. Former Fox News host Megyn Kelly expressed concern about children being exposed to LGBT-related products being sold at Target, saying, “We don’t need our kids seeing this [expletive] when we walk down the aisle at Target.”

Last week, The Daily Wire's Candace Owens wrote: “Target has been an openly perverted company for a long time—many million times worse than Bud Light and worthy of being boycott[ed] out of existence.”

The Epoch Times approached Target for comment.

The Associated Press contributed to this report.
Jack Phillips is a breaking news reporter with 15 years experience who started as a local New York City reporter. Having joined The Epoch Times' news team in 2009, Jack was born and raised near Modesto in California's Central Valley. Follow him on X:
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