Key Takeaways
- Kohl’s shares jumped 12% after Gordon Haskett upgraded the stock to Buy from Hold with a $27 price target.
- The upgrade is a bet on Kohl’s turnaround, and the latest numbers show its sales decline nearly leveling off.
- Haskett’s target is far above Wall Street’s average target of $19 and works out to about 18x forward earnings, against a five-year average of 13x.
- Kohl’s third-quarter report in November will show whether October’s jump in store traffic turned into sales.
Kohl’s (KSS) stock jumped 12% after Gordon Haskett upgraded it to Buy from Hold with a $27 price target. And it did that with the S&P 500 down more than 1%.
One upgrade, a big move
Gordon Haskett made the call before Thursday’s open. The firm sees Kohl’s turnaround as still early, but it pointed to steadier customer traffic. Traffic declines ran in the high single digits earlier this year and have eased to the mid-single digits since June.
Early October’s deal week helped that case. Foot-traffic tracker Placer.ai found that Kohl’s visits ran 9.6% above their recent average on its sale days. That was the biggest lift of any chain it tracked.
Haskett is way ahead of the Street
That $27 target is far more bullish than Wall Street’s average…
The consensus target was $19 as of Monday, already below Wednesday’s close of $22.16. (Individual targets run from $9 to $41.50, so analysts are far apart on this one.)
Kohl’s isn’t cheap anymore, either. Shares traded at 15x forward earnings at Wednesday’s close, above their five-year average of 13x…
After today’s jump, that’s closer to 17x. And Haskett’s $27 works out to about 18x forward earnings.
TIKR tracks 13 analysts on Kohl’s. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Kohl’s, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Kohl’s’ Analyst Ratings
The turnaround has to keep delivering
So any further upside depends on the business. In the second quarter (ended Aug. 1), Kohl’s net sales slipped 0.9%. Gross margin rose 305 basis points to 43.0%, helped by tariff refunds. Management raised its full-year outlook to net sales between down 1.5% and flat, and it restarted share buybacks.
Analysts expect sales to stay at about this level…
Revenue fell from $16.6 billion in fiscal 2023 to $14.8 billion in fiscal 2025. Analysts expect $14.9 billion in both fiscal 2026 (the year ending January 2027) and fiscal 2027. The holiday quarter could move those estimates either way.
The risk is Kohl’s core shopper. CEO Michael Bender has said rising prices for everyday costs like gas and food are squeezing his customers, and a weak holiday season would put that flat revenue forecast at risk.
My take: the turnaround is real, but after today’s jump, about half of the upside to Haskett’s target is already gone. Kohl’s third-quarter report, due in November, covers October’s deal week, so it’ll show whether all that extra traffic turned into sales. Until then, I’d rather wait than chase.
So what is Kohl’s stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
