Target slips after BofA downgrades stock on tariff challenges

Shares of big box retailer Target TGT.N down 1.5% at $102.62

Brokerage BofA downgrades stock to "underperform" from "neutral", cuts PT to $93 from $105

Says TGT's higher import exposure at ~50% of cost of goods sold vs Walmart's WMT.N ~33% implies a need to raise average prices at almost double the rate of WMT to mitigate tariffs

Projects ~8% average price increase for Target to fully offset tariff hit in FY27, compared to an expected 4% to 5% for Walmart

Also sees increasing longer-term sales and margin risks for co given slowing digital sales growth and increasing competition from Walmart and Amazon AMZN.N

But recent merchandising leadership and partnership changes could exacerbate risks in the current dynamic and challenging sourcing environment - brokerage

Average rating of 38 brokerages is "hold" with a median PT of $103.50 - data compiled by LSEG

Up to last close, stock has fallen 24% YTD