Kohl’s Corporation (NYSE: KSS) shares plummeted Tuesday after reporting a first-quarter earnings miss. A couple of analysts weigh in on what to do with the stock moving forward.
“We see good value at current levels—with reset estimates supporting more attractive risk/reward—but we expect valuation to remain under pressure until Kohl’s demonstrates comp re-acceleration,” Baird analyst Mark Altschwager wrote in a note.
Altschwager said Kohl’s has differentiated itself in an evolving retail landscape with its innovative thinking and robust omni-channel platform, but following a successful 2018 the path to growth looks steeper.
“Kohl’s will need to demonstrate that last year’s outperformance was driven as much by internal initiatives/momentum as the more favorable external backdrop," he said. He added that growth is expected to resume in the second half as the Amazon.com, Inc. (NASDAQ: AMZN) returns program and new brands ramp.
Altschwager maintained an Outperform rating and lowered his price target from $80 to $70.
Wedbush analyst Jen Redding maintained a Neutral rating on Kohl's, lowering her price target from $65 to $58.
“Margin trends in the first quarter reflected an unfavorable shift between spring and fall merchandise, while higher digital penetration added to shipping costs. Unfavorable weather, underperformance in the Home Category, and less productive promotional events depressed business vs. expectations,” Redding wrote in a note.
Kohl’s closed down another 3.1 percent at $53.44 per share.
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Photo courtesy of Kohl's.
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