Target (TGT) stock falls for the third day in a row as doubts grow about the turnaround

TLDR

• Target stock fell more than 5% on Monday, its biggest single-day decline since August.
• The stock has fallen nearly 9% over three straight days, its worst stretch in more than a year.
• A Washington Post article asked whether new CEO Michael Fedelke could revive the retailer.
• Barclays reiterated an Underweight rating with a price target of $115, below the current trading level.
• Earnings are scheduled for May 20, with consensus EPS at $1.39 for the quarter.

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Target (TGT) stock fell more than 5% on Monday, marking its third straight day of losses. During those three days, the stock fell nearly 9% — its worst three-day performance in more than a year.

Target Company TGT

The stock was trading at about $118.60 at last check. Despite the recent decline, TGT stock is still up more than 20% year to date, outpacing much of the retail sector and the S&P 500.

Selling pressure rose after The Washington Post published an article Monday morning asking whether CEO Michael Fidelke could bring back the “magic” of Target. The article cited skeptical analysts who expressed concern that Fidelke, a veteran of the company, might not bring the fresh outside perspective needed to turn things around.

These kinds of headlines at a sensitive moment tend to stick around.

On the same day, Barclays Analyst Seth Sigman reiterated his Underweight rating on the stock with a price target of $115. This is below where the stock is currently trading, which doesn’t help sentiment.

Sigman’s primary concern is that Target’s recent improvement may be more about easy wins than real progress. “Our key view is that we feel better about Target returning to baseline after the sales/margin reset in 2025… but it’s not clear how that grows,” he wrote.

In other words, the low-hanging fruit may have already been picked.

Building earnings pressure

the goal The next earnings report is scheduled for May 20, and some investors appear to be cautious ahead of this report. Wall Street consensus is calling for EPS of $1.39 in the quarter, an increase of just over 6%.

For the full fiscal year, EPS is expected to reach $6.03, also up about 6%.

The stock has been in a rough patch for years. TGT has lost nearly half its value since its highs in late 2021, hurt by disappointing sales, slow store traffic, and consumer complaints about cluttered aisles and uninspiring products.

Consumer background adds pressure

Beyond the company-specific hype, broader retail concerns are also in the mix. Consumer sentiment is at multi-year lows, and gas prices are hovering around $4.55 a gallon, squeezing Target’s middle-income core shoppers.

Data showing a decline in purchase intent and brand loyalty has heightened concern. Even as store traffic remains relatively flat, those weak signals give investors reason to pause.

The rise since the beginning of the year, which has exceeded 20%, has led some on Wall Street to question whether expectations have exceeded reality. Monday’s move suggests some of that optimism is fading.

Barclays’ $115 price target remains below the current trading level, with the Underweight rating remaining in place heading into earnings on May 20.