In a report released yesterday, Lorraine Hutchinson from Bank of America Securities reiterated a Sell rating on Kohl’s, with a price target of $18.00.
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Lorraine Hutchinson’s rating is based on several factors that highlight ongoing challenges for Kohl’s despite some positive developments. The company reported a better-than-expected third-quarter earnings per share, driven by stronger sales, improved gross margins, and a favorable tax rate. Management has increased its guidance for fiscal year 2025, reflecting a less severe decline in sales than previously anticipated. However, Hutchinson maintains a cautious outlook, reiterating the Underperform rating due to the challenging macroeconomic environment and the long road ahead for a full sales recovery.
While Kohl’s has shown some sequential improvement in sales, the company has not yet returned to growth, and the upcoming holiday season is expected to be highly promotional, which could hinder further progress. Additionally, credit revenue continues to pressure operating income, with a decline driven by reclassification of expenses and weak performance of the Kohl’s card. Despite some positive momentum, these factors contribute to Hutchinson’s decision to maintain a Sell rating, as the path to sustained improvement remains uncertain.
Hutchinson covers the Consumer Cyclical sector, focusing on stocks such as Nike, Burlington Stores, and Gap Inc. According to TipRanks, Hutchinson has an average return of 3.3% and a 51.81% success rate on recommended stocks.