Target was hit with another downgrade as the stock sits near a three-year low after having lost over $12.4 billion in lost market value stemming from their Pride merchandise controversy.
TARGET, BUD LIGHT INVESTORS LOSE BILLIONS ON MARKETING MISSES
TARGET SHARES HIT THREE-YEAR LOW, JPMORGAN DOWNGRADES STOCK
KeyBanc Capital Markets, on Monday, cut the retailer's shares to "sector weight" from "overweight" as the resumption of student loan payments stipulated by Congress' debt ceiling agreement poses a sizable headwind for discretionary spending for shoppers, which has an elevated discretionary sales mix and a younger, college-educated core consumer demographic.
Last week, JPMorgan also downgraded the stock with analysts citing the possibility of a decline in sales due to consumers pulling back spending amid persistent inflation.
Meanwhile, student loan repayments are scheduled to resume later this year. Under the terms of the deal to raise the debt limit, the pause in student-loan repayments will end by Aug. 30.
Shares have fallen over 20% during the quarter as the retailer deals with the fallout from its Pride merchandising marketing campaign, which offered items that included female-style swimsuits that have the option to "tuck" male genitalia.
Other products were labeled as "Thoughtfully fit on multiple body types and gender expressions," a "Gender Fluid" mug and a variety of adult clothing with slogans such as "Super Queer" among other items.
WALMART’S PRIDE MERCHANDISING UNCHANGED AS TARGET SEES BACKLASH OVER NEW ITEMS
As Fox News Digital first reported, the retailer was forced to remove and relocate some items due to employee safety.
"For more than a decade, Target has offered an assortment of products aimed at celebrating Pride Month," the spokesperson told Fox News Digital. "Since introducing this year’s collection, we've experienced threats impacting our team members’ sense of safety and wellbeing while at work."
"Given these volatile circumstances, we are making adjustments to our plans, including removing items that have been at the center of the most significant confrontational behavior," the statement continued. "Our focus now is on moving forward with our continuing commitment to the LGBTQIA+ community and standing with them as we celebrate Pride Month and throughout the year."
Fox News Digital's Brian Flood contributed to this report.
