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Kohl's (KSS) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research
RLI Corp. (RLI) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

In the latest trading session, Kohl's (KSS) closed at $81.10, marking a -1.17% move from the previous day. This move lagged the S&P 500's daily loss of 0.28%. At the same time, the Dow added 0.09%, and the tech-heavy Nasdaq lost 1.19%.

Heading into today, shares of the department store operator had gained 12.24% over the past month, outpacing the Retail-Wholesale sector's gain of 5.41% and the S&P 500's gain of 2.24% in that time.

Investors will be hoping for strength from KSS as it approaches its next earnings release, which is expected to be November 8, 2018. In that report, analysts expect KSS to post earnings of $0.96 per share. This would mark year-over-year growth of 37.14%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.58 billion, up 5.63% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.45 per share and revenue of $19.87 billion, which would represent changes of +30.07% and +4.05%, respectively, from the prior year.

Any recent changes to analyst estimates for KSS should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 1.01% higher within the past month. KSS is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, KSS is currently trading at a Forward P/E ratio of 15.06. This valuation marks a premium compared to its industry's average Forward P/E of 12.77.

Also, we should mention that KSS has a PEG ratio of 2.26. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Retail - Regional Department Stores was holding an average PEG ratio of 1.31 at yesterday's closing price.

The Retail - Regional Department Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 242, putting it in the bottom 5% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow KSS in the coming trading sessions, be sure to utilize Zacks.com.

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