Retailer Kohl’s (KSS) has been on the ropes lately, with shoppers finding less reason to shop there, if they can even find a store still open. But Telsey Advisory Group recently took aim at the stock as well, and investors responded accordingly. The loss of ground at Tesley sent shares down fractionally in Wednesday afternoon’s trading.
While Telsey analysts left the rating alone, keeping it at a Market Perform, the price target was nowhere near so lucky. In fact, Telsey analysts pared back the target from $17 per share to just $13, and with Kohl’s 52-week low down around $10.91, there is not much more room for price target or price to drop without hitting new lows.
Telsey analysts noted that Kohl’s had seen “…sales challenges…” over the third quarter. Apparel and footwear, two major classes of sales for Kohl’s, also came under fire. While there were some significant gains in somewhat lesser categories like home décor items and gifting—not to mention the surge from Sephora—the losses in the two tentpole sectors overwhelmed these comparatively lesser gains and left Kohl’s on the bad end of the deal.
Bracing For April
Meanwhile, Kohl’s customers will not only have less reason to shop at Kohl’s, they will also have fewer stores at which to shop. We knew about closures coming back in January, but now, fully 27 stores are set to close within the next few weeks. In most cases, only one or two stores per state will close, so another Kohl’s location should not be far away. California is the major exception, losing 10 locations by itself.
But in a move to soften the blow, Kohl’s—via its Kohl’s Cares program—recently handed out an $8,000 gift to the Phoebe Network of Trust. This school health program in New York state represents a means to provide “…health screenings and information to eighth graders…” in certain parts of the state. Kohl’s, naturally, is in favor of healthy children, making this a slam-dunk public relations win.
Is Kohl’s Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Sell consensus rating on KSS stock based on seven Holds and six Sells assigned in the past three months, as indicated by the graphic below. After a 54.1% loss in its share price over the past year, the average KSS price target of $10.80 per share implies 4.26% downside risk.
