Bank of America downgrades Target to sell, says long term outlook is faltering
Target could have a rough road ahead, according to Bank of America. BofA downgraded the retailer stock to underperform from neutral on Friday and trimmed its price target to $93 per share from $105. The firm’s forecast now implies more than 10% downside from Thursday’s $105.25 close. Analyst Robert Ohmes said that Target’s long-term outlook is collapsing as the company falls further behind its peers. TGT YTD mountain Target stock in 2025. “TGT is now underperforming WMT on a comp sales CAGR vs. 2019 and TGT’s digital trends look very challenged, with mobile app monthly active users (MAUs) -4.1% y/y in July compared to WMT US growth of +17.2%,” Ohmes said. “Digital traffic growth is key to scaling digital advertising and 3P marketplace fees, which are increasingly needed to mitigate gross margin pressures and support investments in automation, technology and AI.” The analyst also said Target could be harder hit by President Donald Trump’s tariffs compared to its peers due to its higher costs of imported goods. “TGT’s higher import exposure at ~50% of [cost of goods sold] (vs. WMT ~33%) implies a need to raise avg. prices at almost 2x the rate of WMT to mitigate tariffs, in our view,” the analyst said. “Assuming sales volume and SG & A $s stay flat and no other mitigation strategies in place, we estimate TGT would require an ~8% avg. price increase to fully offset tariffs in F27E compared to 4-5% for WMT.” The downgrade comes ahead of Target’s second-quarter report on Wednesday. Analysts polled by LSEG expect the company to report a 20% year-over-year decline in earnings. Shares have pulled back more than 22% in 2025 and lost another 1% in the premarket following the downgrade. Target did not immediately respond to CNBC’s request for comment.
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