The company had a weak first quarter, dampened by poor weather, weak consumer sentiment, and diversity, equity, and inclusion (DEI)- related strikes.

Investment firm Bernstein on Monday downgraded its rating on Target Corp (TGT) to 'Underperform' from 'Market Perform' and said the company might be at risk of lowering its annual forecast.

According to The Fly, Bernstein quoted credit card data showing that Target had a weak first quarter, dampened by poor weather, weak consumer sentiment, and diversity, equity, and inclusion (DEI)- related strikes.

Shortly after Target scaled back its DEI programs in response to a directive from President Donald Trump, consumer backlash erupted in the form of protests and boycotts—resulting in a noticeable decline in foot traffic across its stores for much of Q1.

Bernstein said what is worrisome is that Target's problems started even before tariffs came into the picture.

Target will likely have to lower its full-year guidance, as it faces a difficult trade-off between stimulating sales growth and maintaining margins.

Target is "unlikely to achieve both and, increasingly, neither," Bernstein said.

On Stocktwits, the retail sentiment for Target was 'bearish,' compared to 'neutral' the previous week.

TGT sentiment and message volume as of May 12 | Source: Stocktwits

In March, Target forecasted annual comparable sales to be about flat, and earnings between $8.80 and $9.80 per share in the year through January 2026.

The forecast did not include an impact from tariffs. The company will publish quarterly results on May 21.

Target stock is down 25.2% year to date.

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