Trump Tariffs Drive Goldman Sachs To Downgrade Target Stock – Analyst Highlights Early Signs Of Weakening Sales

Target (TGT) shares slipped as much as 1.5% in pre-market trading Wednesday after Goldman Sachs downgraded the stock, citing heightened concerns about the impact of potential Trump-era tariffs and a slowing consumer backdrop.

Goldman downgraded the retailer to ‘Neutral’ from ‘Buy’ and slashed its price target to $101 from $142, as per TheFly.

Even with the Trump administration's announcement of a 90-day delay on reciprocal tariffs announced on ‘Liberation Day’, Goldman believes the outlook remains challenging. 

The brokerage sees more downside risk to earnings than upside, given the potential for sales deleverage in a weaker consumer environment.

The new target price implies roughly 9% upside from Tuesday’s close, signaling a more cautious stance. 

Target’s stock price has been down nearly 32% year to date and more than 45% over the past 12 months.

Goldman cited early signs of weakening sales and Target’s heavy exposure to discretionary goods – over 50% of its 2024 product mix – as key risks.

The bank warned that rising trade-related inflation could further dent consumer sentiment and spending. Competitors like Walmart (WMT) and Costco (COST), which are more focused on staples, are seen as better positioned in the current environment.

Walmart and Costo’s stocks have gained over 8% in the past month, while Target’s shares have fallen by over 12%. 

“Discretionary categories will likely recover slower than expected,” Goldman analyst Kate McShane wrote in a note to investors reported by CNBC. She added that early first-quarter (Q1) data already show softening demand, while tariff-driven inflation pressures are intensifying.

In March, Target CEO Brian Cornell warned during an interview with CNBC that product prices may need to rise in response to President Donald Trump’s tariffs.

McShane estimated that Target would need to raise prices between 1% and 11% to preserve margins if selling, general and administrative (SG&A) costs remain steady.

Of the 38 analysts covering the stock, 24 rate it a Hold, according to Koyfin data. The average price target of roughly $129 still implies nearly 40% upside from current levels.

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