UBS Raises Price Target on Kohl's Corp. (KSS) to $50 Following 3Q EPS Beat
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UBS reiterated a Neutral rating on Kohl's Corp. (NYSE: KSS), and raised the price target to $50.00 (from $44.00), following the company's 3Q earnings report. KSS recorded an EPS beat of $0.80, compared to estimates for $0.71. UBS raised FY16 EPS estimates to $3.91 from $3.80 (Street was $3.86).
Analyst Michael Binetti commented, "Kohl’s reported a F3Q EPS beat ($0.80 vs our est for $0.71)—with upside largely from lower SG&A. SSS declined -1.7% (UBSe: -2%)—we thought a late start to cold weather could have meant worse results. BTS trends were strong (September slowed, but trends accelerated through Oct), but we remain concerned that transaction count still declined -5.7% YOY (a -50bp deceleration in the 2-yr stack vs 2Q). We were also disheartened that GM was essentially flat YOY despite inventory down -7.6% YOY in 2Q. That said, the catalyst path forward gets better for KSS. While KSS doesn't have the easiest relative SSS & GM compares in 4Q (Kohl's SSS compare only 40bp easier than 3Q vs 90bp easier for Macy's; Kohl's laps a -80bp GM compare in 4Q vs -288bp compare for Macy's), Kohl's 1Q17 compares are much easier (Kohl's didn't take markdowns until 1Q last year), and impactful new product launches should result in strong EBIT growth entering '17 (KSS launches Under Armour—its biggest brand launch ever—in 1Q)."
Shares of Kohl's closed at $50.97 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst EPS View, Analyst PT Change
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