After the company’s Q1 results release on May 21, BofA downgraded Target Corp. (NYSE:TGT) to Neutral from Buy and substantially reduced the price target to $105, down from $145.
As noted by many other analysts, BofA also acknowledged the rising uncertainty over the company’s execution of its growth strategy. While the firm sees the valuation as cheap, near 10-year lows, the firm remains unconvinced because of persistent weaker sales.
Moreover, the firm believes comparable sales recovery is taking longer than expected. This would mean the company may need to sell merchandise at lower prices due to weaker sales, leading to further margin pressure. With all these issues at play and continued uncertainty, the BofA analyst downgraded the rating.
Target Corp. (NYSE:TGT) is a general merchandise retailer with nearly 2,000 stores across the United States.
While we acknowledge the potential of TGT, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than TGT and that has 100x upside potential, check out our report about the cheapest AI stock.
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