Dive Brief:

• Banking and financial services firm Barclays Thursday downgraded Target’s stock as “underweight” and cut its estimate price from $90 to $70, sending the stock down 3% on the news.

• Analysts have noted that Target’s e-commerce sales are faltering despite boosting its initiatives, falling short of Costco and Wal-Mart Stores Inc., neither of which have strong digital efforts, though Wal-Mart is working to change that. 

• Target must increase its web sales to improve its performance but is missing its own goals, according to the Barclays’ analysts. Last year, Target saw a healthy 31% increase in e-commerce sales thanks to omnichannel efforts and a lowered free shipping minimum, but missed its 40% growth goal. 

Dive Insight:

Like Wal-Mart and other brick-and-mortar rivals, Target is working hard to boost its e-commerce while it also makes drastic improvements to its stores. Last year the retailer said it was spending a billion dollars to beef up web sales, four years after taking back control of them from its former e-commerce partner Amazon. 

The retailer has also been testing ship-from-store, curbside pickup, and grocery delivery and is installing beacons in 50 stores. The retailer has also shortened its delivery window for many items, putting that much more pressure on its operations. 

And, like other retailers, the company is investing heavily in technology — employing RFID tags in products for example— and streamlining its inventory and logistics fundamentals to smooth operations and avoid the kind of e-commerce snafus that brought down its website during its limited-edition Lilly Pulitzer launch and on Cyber Monday.

But e-commerce is notoriously expensive, with complicated logistics compared to brick-and-mortar and lower margins, and Barclays analysts don’t think the retailer will make its marks.

“We believe Target’s comp store sales growth and margin expansion targets are optimistic, as the company faces substantial pressure within the general merchandise category from e- commerce,” a team of analysts led by Matthew McClintock wrote in a note, according to Fortune. “We don’t believe the company can achieve its longer-term goal of at least 3% annual comp stores sales.”