Kohl’s Upgraded to “Buy” at Deutsche Bank; Liking Solid Sales Trends, Easy Comps, Low Valuation (KSS)


Shutterstock photo

Department store operator Kohl's Corporation ( KSS ) on Wednesday caught a big upgrade from analysts at Deutsche Bank.

The firm boosted its rating on KSS from "Hold" to "Buy" and lifted its price target from $49 to $62. That new target suggests a 19% upside to the stock's Tuesday closing price of $52.02.

A Deutsche Bank analyst commented, "We are upgrading shares of KSS to Buy as: (1) improving SSS trends, (2) easy compares, (3) use of its b-sheet to support EPS, & (4) cheap valuation make the stock attractive. While it's fair that the KSS story is not bulletproof, at only 10.0x, we're prepared to absorb the risk and point to our upgrade of TGT in Feb. as a similar set-up. Most importantly, early indicators in various parts of KSS business - national/private brands, traffic, UPT, juniors, and the credit/noncredit gap - suggest to us that KSS has stabilized its comp profile. All told, after severely under-performing the group, the risk/return is attractive, and we see upside in the stock from both multiple expansion and EPS upside."

Kohl's shares were mostly flat in premarket trading Wednesday.

The Bottom Line
Shares of Kohl's ( KSS ) have a 2.46% dividend yield, based on last night's closing stock price of $52.02. The stock has technical support in the $46-$48 price area. If the shares can firm up, we see overhead resistance around the $56-$57 price levels.

Kohl's Corporation ( KSS ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.3 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Created by Dividend.com

This article appears in: Investing , Stocks

More from Dividend.com



Follow on:

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by BankRate.com