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JPMorgan On Kohl's Upgrade: 'Rare Large Cap Value Idea'

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JPMorgan On Kohl's Upgrade: 'Rare Large Cap Value Idea'
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Despite gaining 70 percent over the past six months, Kohl's Corporation (NYSE: KSS)'s stock is still underperforming the S&P 500 index by 30 percent over the past three years.

But according to Wall Street's newest bull analyst, the company should be viewed as a "rare large cap value idea."

The Analyst

JPMorgan's Matthew Boss upgraded Kohl's' stock from Neutral to Overweight with a price target boosted from $51 to $72.

The Thesis

Kohl's should be considered a "rare large cap value idea" within the retail landscape as it boasts an attractive core customer in the $75 to $80,000 salary range, Boss said in a note. The company's store fleet mostly outside of the shopping mall makes it well positioned to deliver on operational and traffic initiatives and deliver a high-single to low-double-digit earnings per share growth rate.

Kohl's underlying comp has improved quarter-over-quarter for four straight quarters, mostly due to management's focus on e-commerce penetration, buy-online-pick-up-in-store, a focus on the active and wellness category, among others, the analyst said. As such, the company has now laid out the foundation for multi-year growth but there are three factors that drive even higher upside, including the recent partnership with Amazon.com, Inc. (NASDAQ: AMZN), market share gain from rivals closing their stores, and a boost in the American middle class.

Price Action

Shares of Kohl's hit a new 52-week high of $65.06 and was seen trading higher by nearly 4 percent Friday.

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Image Credit: MB298 (Own work) [CC BY-SA 4.0], via Wikimedia Commons

Latest Ratings for KSS

DateFirmActionFromTo
May 2018Morgan StanleyMaintainsUnderweightUnderweight
May 2018Credit SuisseDowngradesOutperformNeutral
Mar 2018Credit SuisseInitiates Coverage OnOutperform

View More Analyst Ratings for KSS
View the Latest Analyst Ratings

Posted-In: JPMorgan Matthew Boss retailersAnalyst Color Upgrades Price Target Top Stories Analyst Ratings Best of Benzinga

 

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