Target (TGT) shares are down more than 5% on Wednesday, May 21 after the retail behemoth reported disappointing results for its Q1. 

Investors are bailing on TGT shares this morning because the New York Stock Exchange-listed firm trimmed its outlook for the full year as well. 

Including today’s decline, Target stock is down nearly 35% versus its year-to-date high in January.

Should You Buy the Post-Earnings Dip in Target Stock?

Investors are recommended caution in buying TGT shares on the post-earnings dip as the retailer blamed weaker discretionary spending for an underwhelming Q1. 

Target is poorly positioned for this year as it currently drives nearly half of its overall revenue from discretionary categories – and the recently brewing concerns of a recession suggest it’s a segment of spending that’s unlikely to improve anytime soon. 

Plus, the department store chain sources about 30% of its store-label merchandise from China, which could mean continued challenges for it amidst U.S.-China trade tensions in the back half of 2025. 

Target stock is unattractive at the time of writing also because the retailer lost market share in more than half of the merchandise categories that it tracks internally in the first quarter. 

TGT’s Former Executive Takes a Bearish Stance on the Retail Stock

Target’s former vice chairman Gerald Storch also agrees that TGT is a “very badly broken story” and it’s being “killed” by the likes of Walmart (WMT). 

Walmart’s upsized exposure to essentials or “grocery” instead of discretionary categories helps it remain relatively insulated from turbulence in the broader economy. 

That’s why WMT has rallied more than 50% in the trailing 12 months, while Target stock lost as much as 40% during the same period, the retail industry expert argued on CNBC’s “Worldwide Exchange.”

All in all, there are better alternatives for investors to gain exposure to the retail space this year than TGT shares, Storch concluded. 

Target Shares Are Unusually Cheap at Current Levels

Despite the many headwinds facing Target stock this year, what’s difficult to ignore still is that it’s unusually inexpensive to own at current levels. 

Heading into the retailer’s earnings print, therefore, analysts had a consensus “Moderate Buy” rating on TGT shares with the mean target of about $123 indicating potential upside of more than 30% from here.