Credit Suisse lowers Kohl’s price target to $27 following quarterly results

Credit Suisse lowered the firm’s price target on Kohl’s to $27 from $28 and keeps a Neutral rating on the shares following quarterly results. With solid February trends, inventory down and gross margin pain pulled out of Q1, the firm thinks it will be hard for 2023 EPS to get revised significantly lower again in the near-term – with first half of the year guided particularly conservatively. Further, new CEO Tom Kingsbury directly addressed some operational issues that have been a concern to Credit Suisse. Finally, Kohl’s cash flow metrics should offer a better valuation backstop with EPS expects for 2023 significantly rebased, the firm adds. Nonetheless, Credit Suisse still sees larger systemic issues beyond running inventories better and simplifying the pricing structure that need to be solved before being convinced of Kohl’s long-term margins targets.