Shares of

Target

(TGT) - Get Report

took a minor beating Friday after several analysts downgraded the discounter even after it provided one of the few bright spots in an overall disappointing sales environment in November.

Both Lazard and Citigroup Smith Barney downgraded America's second-largest discount retailer, citing a lack of more upside following the company's positive November sales report and the stock's outperformance vs. its peers in 2004.

Shares were recently down $1.10, or 2.1%, to $51.30; yesterday they added 47 cents, or 0.9%, to $52.40.

On Thursday, Target reported November same-store sales in line with estimates, while a string of other companies across the retail spectrum posted misses that had forecasters slashing their holiday sales predictions. The company reported a 3.2% jump in comps for the month, while chief rival

Wal-Mart

(WMT) - Get Report

confirmed a gain of 1.7%, well below its original guidance.

Target's total sales rose 9% to $4.2 billion from $3.86 billion a year ago.

Todd Slater, an analyst with Lazard, pointed out in a research note that Target has added 39% in 2004, outpacing its peer group and the broader market indices by a significant margin. He said the upside potential of the company's performance going forward appears to be "baked into the stock, and we do not see a near-term catalyst that would create incremental multiple expansion."

Slater lowered his fourth-quarter earnings estimate for Target to 95 cents from 97 cents a share. That still remains above Wall Street's consensus estimate calling for 94 cents a share, according to Thomson First Call. He also lowered his full-year estimates for 2004 and 2005 by 2 cents to $2.14 and $2.66 a share, respectively.

Lazard has long and short positions in Target, and it has an investment banking relationship with the company.

Meanwhile, Citigroup Smith Barney analyst Deborah Weinswig cited the same factors in her research, noting that Target's "same-store sales comparisons become slightly more challenging and this trend continues through March of 2005."

In a contrarian approach, Weinswig advised investors to "take profits on Target and use the funds to invest in Wal-Mart." She noted that Wal-Mart's lower-end customers are poised for stronger purchasing power as oil and gas prices decline.

Citigroup owns shares of Target, and it has an investment banking relationship with the company.