Kohl’s Tops Q1 Earnings Estimates, Raises 2021 Outlook

Kohl’s, the largest department store chain in the United States, reported better-than-expected earnings in the first quarter and lifted its full-year 2021 revenue and profit forecasts.

The U.S. department store retail chain said its net sales rose about 70% to $3.66 billion, beating the Wall Street consensus estimates of $3.48 billion. The company reported earning per share of $1.05, way above the market expectations of zero per share.

The company said its full-year 2021 net sales to increase in the mid-to-high teens percentage range compared to the previous expectation of mid-teens percentage rate increase Operating margin is now expected to be in the range of 5.7% to 6.1% compared to the previous expectation of 4.5% to 5.0%

Kohl’s adjusted earnings per share is now expected to be in the range of $3.80 to $4.20, excluding any non-recurring charges, compared to the previous expectation of $2.45 to $2.95

However, Kohl’s stock slumped over 11% to $53.29 on Thursday. The stock rose over 30% so far this year.

Analyst Comments

“Kohl’s (KSS) 1Q21 $1.05 adj. EPS significantly beat MSe and Street expectations, but with the stock down -11%, good news was more than factored in. Management raised 2021 guidance by $1.30 at the mid-point, but after incorporating 1Q’s beat, consensus 2Q-4Q estimates are already there,” noted Kimberly C Greenberger, equity analyst at Morgan Stanley.

Kohl’s Stock Price Forecast

Eleven analysts who offered stock ratings for Kohl’s in the last three months forecast the average price in 12 months of $63.40 with a high forecast of $71.00 and a low forecast of $47.00.

The average price target represents a 19.94% increase from the last price of $52.86. Of those 11 analysts, seven rated “Buy”, three rated “Hold” while one rated “Sell”, according to Tipranks.

Morgan Stanley gave the stock price forecast of $47 with a high of $72 under a bull scenario and $22 under the worst-case scenario. The firm gave an “Underweight” rating on the department store retail chain’s stock.

Several other analysts have also updated their stock outlook. UBS raised the target price to $63 from $54. Evercore ISI lifted the target price to $64 from $58. JPMorgan upped the target price to $60 from $57. Wedbush raised the target price to $65 from $29. Jefferies lifted the target price to $71 from $66.

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