UPDATE: Deutsche Bank Upgrades Kohl's to Buy on Valuation and SSS Improvements
Deutsche Bank raised its rating on Kohl's (NYSE: KSS) from Hold to Buy and increased its price target from $49 to $62.
Deutsche Bank said, "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 closed at $52.02 on Tuesday.
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