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Target Stock Hit By Another Downgrade

Target’s stock has been downgraded from a “buy” to neutral by Citi analyst Paul Lejuez, explaining that the company’s high exposure to discretionary sales does not put them in a strong position given the current economic landscape.

“Considering the competitive landscape, we believe Walmart is likely to continue gaining market share (including from Target), and Target’s high exposure to discretionary sales (55% of sales) will not serve them well in the current macro backdrop (which became more evident this earnings season),” Lejuez wrote to investors in a note.

New data has shown that Target’s store traffic dropped by 13.9% in the final week of May, something that Lejuez claims is a result of shoppers adopting more cautious buying habits amid steep inflation.

Shares in the company fell 1.5% during premarket trading on Friday, while shares remain 17% lower since mid-May as investors worry about third-quarter sales.

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