Target Loses $4B in Less Than a Week as Stock Price Continues to Slide

Target's stock price has continued to slide over the past week, with the company—one of the largest retail chains in the country—losing $4 billion in market cap since May 27, as the controversy surrounding its 2023 Pride collection continues.

Last week, the company reported a market cap of $64.12 billion, according to website Companies Market Cap, while as of June 2, it had dropped to $60.54 billion. As of the same day, Target's shares were down by 2.44 percent to $128.62, as shown by Google Finance's data.

The company was underperforming compared to its main competitors, with Amazon's shares growing by 2.30 percent on Friday, Walmart's shares increasing by a more modest 0.57 percent, and Costco's shares by 0.53 percent.

It's nothing new for Target, which in the last month has been on an unprecedented losing streak—the longest in the company's history since an 11-day stretch in early 2000. According to MarketWatch's data, Target's shares have dropped by 16.08 percent over the last month, and 5.59 percent in the past five days.

The retail chain's performance has been marked—and somehow been exacerbated—by JPMorgan's decision to downgrade it from neutral to overweight on Thursday, which has led investors to flee Target's stock.

"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, announcing the company's move.

"While still positive on a [three-year] basis, [Target] has been giving back shares 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 added. "This could turn [Target's] traffic negative after an impressive run of 12 consecutive positive quarters."

Target has recently found itself in the middle of a culture-warm storm surrounding its 2023 Pride collection, released earlier this month in its stores.

The presence of several trans-friendly items in Target's collection has caused anger on social media by conservatives and anti-trans activists, including some feminists and even some gay groups, which have called for a boycott of the retailer. After weeks of fierce debate on social media, the company announced it would have removed some of its controversial items as a result of threats made to its staff in stores.

The announcement has done little to tamper the outrage surrounding the company, on one side galvanizing the same critics who called for a boycott of the company and on the other side angering LGBTQ+ and trans rights activists.

A Pandemic 'Hangover'

But while Target's losing streak could appear a direct result of the controversy surrounding the company's Pride collection, and this might have weighed into it, there are also other factors to consider—like the state of the U.S. economy.

Even before the backlash received for its Pride collection, Target was already facing a potential downturn as customers cut back on discretionary spending amidst a weakening broader economy, according to CNBC.

Talking to Newsweek about Target's apparent downturn, Jeremy Bowman, a contributing analyst at The Motley Fool, an investment advice firm, said that this might be the result of the boom in earnings experienced by the retailer during the years of the pandemic.

Target's stock price trended upwards from $91.18 a share on April 3, 2020, and peaked at $261.42 on August 13, 2021. That price remained elevated through 2021 and into the following year, before dropping to $153.15 in May 2022.

"What's happening now is they have a bit of a hangover from that boom," Bowman said. "They had huge growth for a couple of years and now they're struggling to keep up that momentum and absorb the inflationary costs that they're paying."

Newsweek contacted Target's press team for comment by email.