(CercleFinance.com) – Bank of America on Wednesday downgraded its opinion on the Target stock, which it reduced to ‘neutral’ against ‘buy’, with a price target reduced from 235 to 165 dollars.
In a research note, BofA explains that the American group is the victim of a sector in full change which sees distributors accumulating stocks, and not only in equipment for the home or clothing.
The middleman points out that these upheavals come at a time when Target is forced to raise prices to meet rising gasoline and other costs.
According to Bank of America, uncertainty should nevertheless continue to dominate in the second half, as many other retailers are also forced to sell their inventories, which should weigh on Target’s market valuation.
Over the long term, however, the analyst believes that the Minneapolis group remains ‘well positioned’, as illustrated by the increase in its store traffic in the last quarter (+3.9%) as well as the strength of its activity in categories with regular purchases (food/drink, home products, beauty), which he believes should support the development of its sales.
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