Investors should stay away from Target on concerns that sales may have peaked, Citi warned. Analyst Paul Lejuez downgraded the retail giant to neutral from buy and cut his price target to $130 from $177. Lejuez’s new target suggests the stock is down nearly 1% over the next year from where the stock closed on Thursday. Its previous target for comparison reflected a 34.8% rally potential. “Despite the recent pressure on the stock, we cannot recommend that investors buy the stock,” he said in a note on Friday, adding that “the risk is more to the downside in the near term.” Lejuez said 2023 shows warning signs that sales have peaked and are likely to decline further in what he called a “reversion.” This would mark a turnaround after the retailer saw a significant increase in sales between 2020 and 2022 as the Covid-19 pandemic prompted a shift in spending from services to goods. He noted that the company’s traffic tracker showed a 400 basis point slowdown in the May fourth quarter to close out a difficult month, followed by another difficult week in early June. Taken together, Lejuez said two weeks of data makes him cautious about the near future. In addition, he said Walmart, Citi’s top pick, is likely to continue to gain market share from Target and other retailers. He added that Target will face a difficult economic environment with about 55% of sales in the discretionary area. The retailer’s discretionary bias effect became more apparent in the latest earnings season and should be a problem for at least the rest of the year, the analyst said. With 2023 set to be a year of sales declines, Lejuez lowered his estimates further, saying that raises the question of how deep sales could fall. “This is not a new concern,” he said. “This is the main reason why TGT has been our lowest buy-rated stock for some time, but we are now more concerned than ever and can no longer recommend that investors buy TGT.” — CNBC’s Michael Bloom contributed to this report.