UPDATE: Deutsche Bank Raises PT on Kohl's Corporation on FY13 Earnings Forecast
In a report published Friday, Deutsche Bank reiterated its Hold rating on Kohl's Corporation (NYSE: KSS), and raised its price target from $40.00 to $42.00.
Deutsche Bank noted, “We found Kohl's FY13 earnings forecast for EPS of $4.15-$4.45 a bit surprising. Specifically, on GPM, the company expects expansion of 15-30 bps in FY13 including flat to +20 bps in 1Q (following 5 consecutive quarters of declines). We, on the other hand, believe GPM declines could continue given (a) clearance related to cold-weather/seasonal items still on the selling floor during our February store checks, (b) substantially heavier inventory levels YOY (up 17.2% at YE and up 6.0% YOY on comparable per store basis) than comp trends (guidance for 0.0%-2.0%) in the Spring/Summer given the 6-9 month lag time for placing orders (product was ordered when sales expectations were higher), and (c) a need for the company to invest further in price and promotion given the flat to down traffic experienced throughout 2012.”
Kohl's Corporation closed on Thursday at $46.10.
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