Shareholders of Kohl's Corporation (NYSE:KSS) stock are poised to benefit from the tug-of-war between the company’s board and an activist investor group, according to BofA Securities.

The Kohl's Analyst: Lorraine Hutchinson maintained a Buy rating for Kohl's while raising the price target from $60 to $70.

The Kohl's Thesis: Given the “push for better performance,” there seems to be limited downside to the company’s stock, Hutchinson said in the note.

Related Link: Activist Investors Seek To Pack Kohl's Board Of Directors

“Kohl’s turnaround potential is supported by cost reductions and the addition of Sephora, and its superior balance sheet, off-mall fleet and value proposition position it better than peers,” she wrote.

The analyst noted that an investor group, which has a 9.5% stake in Kohl’s, has nominated nine independent candidates for election to the board, due to poor strategy and execution.

“We do see opportunities for better execution around sales strategies, further SG&A reductions and faster shareholder returns. In addition, adding new expertise to the Board could help with the recovery,” Hutchinson said.

KSS Price Action: After rising about 9% in Monday's session, shares of Kohl’s had declined by 1% to $55.55 at the time of publication Tuesday.

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