A new wave of consumer activism is sweeping the nation, with protests and boycotts targeting companies in a fraught political environment. Is Wall Street bracing for the impact, if any? 

For more than a month now, for example, Michael Galvez, a leading figure in the Latino Freeze Movement, has been calling on consumers to boycott brands going along with President Donald Trump's anti-diversity, equity, and inclusion (DEI) initiatives. We can’t keep “spending our money on companies that may not value our community,” Galvez told Yahoo Finance. 

Meanwhile, demonstrators are gathering outside Tesla (TSLA) stores nationwide to protest CEO Elon Musk’s involvement with the Trump administration and his push to cut government spending. 

Some Wall Street analysts argue that Musk’s political involvement — with the Department of Government Efficiency, i.e., "DOGE" — has potential consequences. Even some Wall Street Tesla bulls are acknowledging the turmoil. 

"While the DOGE/Trump Musk iron clad partnership has created major brand worries for Tesla, we estimate less than 5% of Tesla sales globally are at risk from these issues despite the global draconian narrative for Musk," Tesla bull Dan Ives of Wedbush Securities wrote to clients this week. 

In the media sector, The Washington Post lost 75,000 digital subscriptions after its owner, Amazon co-founder Jeff Bezos said its opinion section would exclusively align with libertarian priorities. Prior to this, the newspaper reportedly lost 250,000 of its readers — or 10% of its customer base — after Bezos blocked its editorial board from publishing an endorsement of former Vice President Kamala Harris. 

This ongoing chain of boycotts, including the Latino Freeze Movement, has set off some alarm bells. RBC Capital Markets managing director Nik Modi warned clients in a note that “the potential ramifications of this backlash should not be downplayed.”

Companies like Target (TGT), Walmart (WMT), Bezos' Amazon (AMZN), and Coca-Cola (KO) are among those that recently reversed their stances on diversity, along with Google (GOOG), Meta (META), and Tractor Supply (TSCO).

Joe Feldman, senior managing director and assistant director of research with Telsey Advisory Group, told Yahoo Finance that “the impact on sales and profit is a concern as an investor."

Target, in particular, has become a focus point of the consumer activist movement as it dialed back its pro-diversity, equity, and inclusion policies earlier this year, including ending its Racial Equity Action and Change (REACH) initiatives. 

"It's always a concern when you have any kind of consumer activism," Kris Merz, a retail expert and partner at Columbus Consulting, told Yahoo Finance. "The fact that some brands are flip-flopping out of their positions is an issue because people who trust them may not continue to buy from them." 

The series of boycotts against Target started in late January, followed by the economic blackout on Feb. 28. Data from Placer.ai found Target's visits dropped nearly 5% year over year during the week of Feb. 24. Researchers at Placer.ai attribute that "economic blackout" may have been influenced but its specific impact is difficult to isolate. This differs from Walmart seeing a 0.6% decline in foot traffic during the same week.

Other consumer groups and activists, including the Black faith community, called for a 40-day shopping fast at Target during Lent, which began on March 5.

“Depending on the margin, that could hurt,” Telsey's Feldman said. “If sales come under pressure as a result, it could disrupt your inventory purchases and create imbalances in your stock.”

The retail giant blamed other reasons for a slow February after reporting its fiscal fourth quarter earnings, yet not a single analyst raised the issue of the recent boycotts during the earnings call. 

Despite this, 16 analysts cut price targets by an average of 7.2% since the company reported earnings March 4. The 12-month price target is $138.79 compared to $146.52 pre-earnings, according to data complied by Bloomberg. 

Target declined to comment to Yahoo Finance about the boycott. A spokesperson for Target said the company is still committed to inclusion. 

RBC's Modi emphasized that the Latino backlash could “inflict a similar or greater degree of damage” than the conservative boycotts previously led against companies like AB InBev (BUD) and Target. 

Data from the US Census Bureau shows that Hispanics/ Latinos were the second largest racial group in the US in 2023, accounting for about 20% of the population and contributing about 71% of the country’s overall population growth between 2022 and 2023.

The community is not monolithic, however. There was a record turnout of Latino voters supporting Trump in the election. Organizers behind the Latino Freeze Movement are bipartisan, allowing those who disagree with the current federal government to still take action by voting with their wallets.

ASSOCIATED PRESS

The movement raises the stakes for certain companies. According to Modi’s analysis, companies with the greatest exposure to this demographic include Constellation Brands (STZ), Coty (COTY), and Primo Brands (PRMB).

“It's so early to quantify,” Modi told Yahoo Finance in an interview, adding, "This is going to be a problem. So just be aware of it."

Dani Romero is a reporter for Yahoo Finance. Follow her on X @daniromerotv.

Click here for in-depth analysis of the latest stock market news and events moving stock prices

Read the latest financial and business news from Yahoo Finance