In late May, Target (NYSE: TGT), the retail giant, experienced a sharp decline in its stock price as it found itself embroiled in controversy over its Pride-themed clothing line for children, drawing backlash from conservative circles.
However, the repercussions didn’t stop there. The company is now facing an additional blow as a conservative legal organization, spearheaded by a former advisor to Donald Trump, is suing Target.
This legal action is centered around shareholder losses stemming from boycotts triggered by the retailer’s Pride Month displays. Consequently, Target’s stock plunged to its lowest point in three years on August 15, marking a tumultuous period for the embattled retailer.
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Target stock price analysis
At the time of publication, Target’s shares were standing at $125.05, after closing 3.38% lower on Tuesday, August 15.
The last time the retail company’s stock was trading at this level was in July 2020 during the peak of the coronavirus pandemic.
TGT lost more than 4.2% over the past week and over 5.3% on a monthly basis.
Over the past 6 months, the stock plummeted more than 28%, losing around $24 billion in market cap during this downtrend.
Why is TGT declining again?
Target’s latest price slump comes a day after a legal group spearheaded by a former advisor to Donald Trump filed a lawsuit against the retailer, citing losses triggered by the boycotts.
The suit, led by Stephen Miller’s America First Legal, accuses Target of misleading investors when it claimed it was keeping tabs on risks related to its diversity, equity, and inclusion policies.
As noted earlier, TGT’s share price plummeted nearly 20% since mid-May, when the retail giant began facing protests, bomb scares, and in-store threats from conservative activists.
The shareholder at the center of the lawsuit is Brian Craig, a Florida resident who invested about $50,000 in more than 216,000 shares of TGT in April 2022. A year later, the value of this investment declined to below $35,000, followed by another drop to $28,896 by June 14, right after the backlash took place.
Furthermore, another factor that contributed to TGT’s latest downswing is the company’s Q2 2023 earnings report, which showed the retailer missed analysts’ estimates.
As a result, Target slashed both its full-year sales and profit forecasts, offering a murky outlook even though many economists are expecting the US to avoid recession.
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