BMO Capital Markets is losing faith in Target’s growth story due to the challenges it faces ahead. Analyst Kelly Bania downgraded retail shares to market activity in a note to clients on Wednesday, saying that sufficient inventory will likely continue to be a challenge. awareness towards Target in the near future. “While we continue to expect TGT’s EBIT margin to recover to 6%+ from its decline in 2022, we believe the stock is likely to be priced reasonably and has already reflected earnings rebound (we forecast earnings to recover close to 90% next year), but we are less certain on how much sales to tie to this EBIT margin due to TGT’s upward trend in market share, ” she wrote. Bania also lowered BMO’s price target on the stock to $165 from $190 a share, indicating a slight 6% gain from Wednesday’s closing price. The downgrade from BMO comes after the company posted disappointing earnings and warned of a mellow holiday quarter due to slowing sales. Stocks plummeted 13% on Wednesday. Bania sees declining market share as one of the biggest risks ahead for Target, estimating that the company is on track to lose more than $3 billion in market share this year and is at risk of more losses in the future. long-term. “We are concerned that TGT may have developed a strong traffic reliance and may be advertising/managing a declining GM ratio to maintain its incredible market share and sales growth. The over $30 billion in sales it has made over the past few years leaves us with less certainty as to how much sales we should stick to this normalized EBIT ratio of 6-7%.” she wrote. Deutsche Bank also changed its position on Target stock following Wednesday’s earnings results. Analyst Krisztina Katai downgraded the stock to hold from buy, citing waning confidence in Target’s ability to turn a profit in 2023. In our view, the earnings recovery story is harder to defend,” she said in a note to clients Thursday. “Ultimately, we can no longer confidently model EPS on $12 next year.” Katai cut the bank’s price target to $144 a share from $183, representing a 7% drop from Wednesday’s closing price. Today, the stock has lost nearly 33%, nearly 40% below its 52-week high. – CNBC’s Michael Bloom contributed reporting