Citi sticks to Neutral on Kohl’s stock, expects slight Q2 beat with cautious tone By Investing.com

On Tuesday, Citi maintained its Neutral stance on Kohl’s (NYSE:KSS) shares, with a consistent price target of $21.00. The firm’s analysis suggests that Kohl’s second-quarter earnings per share (EPS) and sales are expected to align with consensus estimates. Citi projects a second-quarter EPS of $0.47, slightly above the consensus of $0.45, with comparable sales (comps) decreasing by 2.0%, compared to the consensus estimate of a 1.7% decline.

The report indicates that while the quarter’s performance likely met management’s expectations, Citi anticipates Kohl’s to revise its fiscal year 2024 (F24) guidance upwards. This adjustment is expected due to the postponed implementation of the Consumer Financial Protection Bureau’s (CFPB) late fee cap, which could potentially increase F24 EPS by $0.80 to $1.00, assuming the cap is not enacted in F24.

Citi notes an improvement in the underlying fundamentals of Kohl’s business in the second quarter compared to the first, with Placer traffic data indicating a sequential increase in customer traffic of over 400 basis points. Despite these positive signs, the firm expects Kohl’s to maintain a cautious outlook due to the uncertain economic environment and the weakest traffic observed in July within the quarter.

The analysis also points out that with nearly 40% of Kohl’s stock being shorted, it is currently the most heavily shorted stock. However, Citi believes that it would require a significant earnings miss to drive the stock price lower, which they do not anticipate occurring.

In other recent news, Kohl’s Corporation (NYSE:) has been the subject of several analyst adjustments following a challenging first quarter. CFRA reduced the 12-month price target on the retailer’s shares to $20, while maintaining a Hold rating. The adjustment was based on a revised FY 25 EPS estimate, now set at $1.75.

Similarly, Baird reduced the price target to $27.00, but kept an Outperform rating on the stock. Telsey Advisory Group cut its price target for Kohl’s to $23, maintaining a Market Perform rating. Lastly, Jefferies reduced its price target from $23 to $19, retaining a ‘hold’ rating.

In the midst of these adjustments, Koss Corp. experienced a remarkable surge in its stock price, fueled by social media speculation. The speculation was driven by posts on social media platforms, particularly a post by Keith Gill, also known to his online followers as ‘Roaring Kitty’. The stock’s remarkable performance comes without any apparent fundamental justification, according to Steve Sosnick, a market strategist at Interactive Brokers (NASDAQ:).

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