UBS Raises Price Target on Kohl's Corp. (KSS) to $44 Following 2Q EPS Beat
UBS reiterated a Neutral rating on Kohl's Corp. (NYSE: KSS), and raised the price target to $44.00 (from $37.00), following the company's 2Q earnings report. KSS reported EPS of $1.22, ahead of the Street's $1.03 estimate.
Analyst Michael Binetti commented, "KSS reported 2Q EPS of $1.22 (UBSe: $1.04, Street $1.03). SSS of -1.8% was ~in line with our -2% est. Upside was from better-than-expected GM (+50bp YOY vs UBSe: -50bp), and strong inventory mgmt. (inventory was down -7.6% YOY). KSS maintained guidance for inventory to be down –MSD% by year end—which should offer downside support to GMs in 2H. We're encouraged that KSS lowered '16 EPS guidance (we think this was expected after a 1Q miss and now removes a NT stock overhang). We're raising our '16E EPS to $3.80 (from $3.62), based on 1) SSS -1.6%; 2) GM flat YOY; and 3) SGA deleverage of 55bp. We're forecasting SSS of -1% in 3Q, and -0.5% in 4Q."
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Shares of Kohl's closed at $44.19 yesterday.