Bank of America Securities analyst Lorraine Hutchinson has reiterated their bearish stance on KSS stock, giving a Sell rating yesterday.
Lorraine Hutchinson’s rating is based on several concerning factors regarding Kohl’s financial outlook. The company has guided for a decrease in sales for the fiscal year 2025, which is expected to be challenging due to a difficult consumer environment. Kohl’s has issued an earnings per share (EPS) guidance significantly below consensus expectations, indicating ongoing sales struggles and resulting in margin declines. Additionally, the company has reduced its quarterly dividend in an effort to rebuild cash reserves.
Another factor influencing the Sell rating is the decline in other revenue, primarily driven by lower credit balances. Despite the rollout of a co-branded credit card, the expected benefits have not materialized due to the lack of credit line increases, limiting consumer spending. Management has also guided for a decrease in other revenue due to an accounting change and lower accounts receivable balances. Furthermore, Kohl’s continues to face negative comparable sales, with management’s strategies to improve the business yet to show clear signs of success. These elements combined have led to a reduction in the price objective and a cautious outlook on the stock.
According to TipRanks, Hutchinson is a 4-star analyst with an average return of 5.3% and a 52.72% success rate. Hutchinson covers the Consumer Cyclical sector, focusing on stocks such as Nike, Burlington Stores, and Birkenstock Holding plc.
In another report released yesterday, Morgan Stanley also maintained a Sell rating on the stock with a $8.00 price target.
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