There is some confusion and denial in the mainstream media over the real impacts of the ongoing boycott of Target (TGT) because of its controversial bathroom policies allowing men into women's rooms and vice versa, which came into force April 19.

The left-of-center Associated Press released a superficial report last week on the causes of Target's current financial situation:

Target's weak store sales and its expectations for this quarter, released Wednesday, pushed shares down 9 percent in morning trading. Shares of almost every retailer followed suit in what is shaping up to be a miserable year ... Shares of J.C. Penney, Kohl's, Macy's and Nordstrom fell as well. Shares of Wal-Mart, which reports earnings on Thursday, fell almost 4 percent.

Companies such as J.C. Penney, Kohl's, Macy's, and Nordstrom are not Target's true competitors.  Their market caps are much smaller than Target's, and they cater to a far smaller cross-section of the retail sector.  Target's natural competition comes from broad-spectrum discount retailers such as Walmart (WMT) and Costco (COST), which hold similarly sized market caps, and lesser so from other larger low-cost retailers such as Dollar General (DG) and Dollar Tree (DLTR).

The likely impact of the consumer boycott against Target can be determined by comparing its market cap performance for equal periods before and after the transgender policy came into force against that of its competitors.  As the graph below shows, Target's normalized market cap has declined far more than any of its competitors since April 19.

But as is clear, there is some modest variability in the post-April 19 market cap performance for each of Target's competitors.  To determine which is the best comparison for assessing the impact of the boycott, we need to look at the pre-April 19 correlations between each competitor and Target's market cap.

The best pre-April 19 correlation with Target's market cap is Walmart.  From March 14 through April 18, there was excellent agreement between the market cap of the two companies, whereas the other competitors saw substantially worse agreement with Target's market cap.

Although past performance is not always a good predictor of future trends, in this type of widely used correlational analyses, the message is typically correct.  Where the financial performance of two companies was closely correlated in the past, and a loss of correlation coincides with an event, the event is usually seen as essentially the sole cause of any subsequent fiscal deviation.

In other words, the likely effect of the Target boycott can be best determined by comparing the post-April 19 performance of its market cap against Walmart.  The market cap of the two companies tracked closely before April 19 but began to progressively deviate soon after consumers and investors became aware of Target's bathroom policy.

Walmart's current market cap ($220.83 billion) is effectively equivalent to where it was on April 19 (219.38 billion).  By comparison, Target's current market cap ($41.22 billion) is $9.2 billion lower than it was when the bathroom policy was implemented ($50.39 billion).

Consequently, the rational conclusion is that the Target boycott has already directly cost the company more than $9 billion in market cap.  Even if we adopted a more conservative approach that averaged the post-April 19 market cap performance of all Target's natural competitors, we still end up with nearly the same boycott-induced loss of market cap.