It's time to step to the sidelines on Target , according to Wells Fargo. Analyst Edward Kelly downgraded shares to equal weight from overweight, saying a weaker consumer in 2023 will be especially challenging for general merchandise companies. "TGT's outlook has deteriorated meaningfully and we no longer see it as an attractive investment into an uncertain 2023," Kelly wrote in a Wednesday note. Target shares dropped more than 35% in 2022, greatly underperforming the S & P 500's 19% fall, as it dealt with a challenging retail environment. The analyst expects Target to continue struggling going forward as retailers will have to navigate a disinflationary environment, which could mean lower pricing on products on top of weakening sales momentum. The analyst's $142 target price, dropped from $170, represents a more than 6% decrease from Tuesday's closing price of $151.73. Shares fell 1% in Wednesday premarket trading. "Our concerns include the potential for a sustained period of comp weakness in general merchandise, an inflection to negative traffic in Q4, a lack of visibility on the timing/magnitude of the margin recovery story, and the return of pre-COVID model scalability concerns," Kelly wrote. "We see potential for $8-9 in EPS in 2023 and limited stock upside despite low expectations," Kelly added. Instead, Kelly said other big-box retailers such as Walmart are better equipped to handle disinflation, as well as cater to a "better economically positioned" low-income consumer. —CNBC's Michael Bloom contributed to this report.