From the retail apocalypse to lawsuits and tariff shocks, Target Corporation (TGT) has been in a pickle, and its stock performance over the past five years makes that painfully clear.
Once pitched as a big-box growth story, Target has instead become a textbook laggard.
Context is key in markets. While many investors fixate on Target’s 31% year-to-date drop, the reality is that the stock has been underperforming for years.
Charlie Billelo, market strategist at Creative Planning, recently pointed out Costco’s (COST) remarkable run, which surged 217% over the past five years. Meanwhile, Target is sown 27% in the same stretch.
That not only trails Costco but also the S&P 500, which more than doubled over the period.
Missteps and mounting challenges
Target sits in a retail landscape remade by e-commerce and dominated by low-cost heavyweights like Walmart (WMT).
The company’s attempt to pivot toward more discretionary products — higher-margin home goods, apparel, and decor — backfired in an environment where consumers remain laser-focused on price.
Then came tariffs. Because Target imports roughly half its merchandise, analysts estimate it would need to lift prices by about 8% to absorb tariff costs, nearly double Walmart’s rate, thanks to Walmart’s scale and supply chain leverage.
The result of it showed in the last earnings report.
In the second quarter, comparable sales fell 1.8% year-over-year, dragged down by a 3.2% slide in physical stores. Net income dropped to $934 million from $1.19 billion, underscoring pressure on margins.
Target’s leadership hopes incoming CEO Michael Fiddelke, who takes the reins next year, can reset the narrative. But skepticism runs high, with analysts arguing the retailer still hasn’t delivered a credible turnaround strategy.
Analyst downgrades pile up
Wall Street isn’t buying the recovery story.
In recent weeks, Target has been hit with a flurry of downgrades, including cuts from Bank of America, Edgewater Research, Bernstein, and Barclays. Most now peg the stock’s fair value between $86 and $91.
At roughly $93, analysts say TGT looks fully priced with more downside risk than upside. Bank of America’s downgrade stood out, slashing its rating to “Sell” and citing a deteriorating long-term outlook.
Beyond tariffs and rising competition, the bank flagged Target’s weak digital presence. Its app lags badly behind Walmart’s in engagement, which is a metric increasingly seen as a proxy for loyalty and market share in the retail wars.
For investors, that’s the bigger problem. Target isn’t having just temporary struggles. It’s failing to prove it belongs in the same conversation as peers that are thriving in a new era of retail.
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