UPDATE - UBS Initiates Coverage on Kohl's (KSS) with a Neutral; Well Liked, But Big Battle in Mid-Tier Group

UPDATE - UBS initiates coverage on Kohl's (NYSE: KSS) with a Neutral. PT $53.

Analyst, Michael Binetti, said, "In our view, KSS is a solid mid-tier d-store operator with efficient supply chain/store operatings, and a high 10% FCF yield to support EPS as unit growth decelerates. While the stock has underperformed amid SSS volatility and maturing capacity growth, we believe a new EPS algorithm (with +LSD SSS and EBIT growth, and the potential to buyback 5% or more of shares/yr consistently) will eventually lead to P/E re-expansion toward mid-tier peers (at 12x vs 10.5x today)."

"In our view, if KSS can stabilize SSS in the low single digits it could allay investor fears about operating profit growth, the company could finally get credit for share buybacks, and the multiple could begin to re-expand toward the peer-group average."

To see more ratings on KSS, Click Here

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