Kohl's (NYSE:KSS) Stock Downgraded by TD Cowen to Hold with $21 Price Target
In a recent update, TD Cowen downgraded Kohl's (NYSE:KSS) stock from Buy to Hold and lowered the price target to $21 from $25. The company continues to face challenges in its core apparel and footwear segments, leading to negative comparable sales for the past 10 quarters. Despite efforts to introduce initiatives in new categories, recent guide raise was mainly due to credit card revenues. The stock valuation appears fair at 10 times earnings, with potential rangebound movement until clearer growth visibility.
Kohl's management is actively addressing challenges in core categories like apparel and footwear, which account for a significant portion of its product mix. The company's CEO is engaging with secondary markets to improve merchandise offerings, particularly in the juniors' category. Recent earnings report for Q2 2024 showed a 13% increase in earnings, exceeding profit expectations despite declining sales.
In response to these developments, Baird lowered the price target to $25 but maintained an Outperform rating, while JPMorgan downgraded the stock to Underweight with a $19.00 price target. Kohl's has raised its full-year earnings guidance for 2024, excluding potential impacts from regulatory rulings, and revised its EPS outlook to $1.75-$2.25. The company also expects a reduction in expenses and gross margin expansion.
Kohl's is implementing marketing strategies to enhance customer experience, including partnerships with Babies "R" Us. Despite challenges from inflation and high interest rates, the company remains optimistic about long-term success driven by strategic initiatives.
In conclusion, investors should monitor Kohl's stock closely as it navigates through challenges in its core segments and implements growth strategies. The recent downgrades and adjustments in price targets indicate a mixed sentiment in the market, but the company's proactive approach and revised guidance show potential for future growth and success.