Kohl shares slide after Cowen downgraded by

© Reuters. Kohl’s (KSS) Shares Slide after Cowen Downgrade

By Sam Boughedda

A Cowen analyst downgraded Kohl’s (NYSE:) to Active Market from Outperform on Thursday, lowering the company’s share price target to $35 per share from $60.

He wrote in a note to investors that middle-income consumers and Kohl’s margins are under pressure.

“We downgrade the stock as a weakness and inflationary The analyst explained that the consumer landscape could drive down EPS and long-term visibility in the cloud for EBIT expansion. Specific concerns are increased inventory levels, reduced instruction, traffic and promotions, and product implementation for children and women. “

While the analyst says that “bright spots remain,” including “well-executed Sephora beauty partnership, ~6.8 percent FCF yield, diversified execution, and loyalty program.” necessary”, he believes that Kohl’s is susceptible to pressure by middle-income consumers who are experienced.

“In previous instances where KSS ignored low EBIT expectations (shown by estimated EBIT declines year-over-year), the stock had an average negative reaction of 11% despite only a modest adjustment. revised down 3% on average, leading to multiple contractions, while the current Street FY22 estimate is nearly $2.30 or 34% below the previously stated EPS guidance of 6. $.65 (midpoint), we believe there could be more downside risk if KSS misses expectations due to investor appetite for lower retail stocks,” said analyst. said more.

Shares of Kohl fell more than 3.5% on Thursday.

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