KSS: Expense Discipline And Inventory Initiatives Will Determine Turnaround Prospects

Kohl's analyst price targets have moved significantly higher, with many analysts citing improving quarterly performance and better inventory management as key drivers behind raises from $8 to $17 per share.

Analyst Commentary

Following Kohl's latest quarterly earnings, analysts have expressed a range of outlooks driven by valuation updates, execution improvements, and ongoing business challenges. Below is a summary of the predominant themes emerging from recent research notes:

• Bullish analysts highlighted better-than-expected quarterly results and meaningful upgrades to full-year guidance. This has boosted confidence in management's execution.
• Several analysts cited Kohl's improved inventory management and expense controls as core factors behind their upward revisions to price targets.
• There is recognition of solid progress on self-help initiatives and operational efficiencies. These have helped offset weak traffic trends and supported a more constructive near-term outlook.
• Some see the potential for notable upside to earnings estimates if recent improvements in sales momentum continue through the upcoming quarters.

• Bearish analysts remain cautious as core sales trends are still categorized as weak, and comp sales are yet to demonstrate lasting growth.
• There is ongoing concern that Kohl's must re-engage its core customer base to sustain any positive momentum.
• Broader retail sector headwinds and the need for more evidence of a full turnaround contribute to a conservative stance on the company's long-term growth prospects.
• Downward pressures on store traffic, as noted by some firms, challenge the sustainability of recent gains and temper optimism around recent results.

What's in the News

• Evercore ISI raised Kohl's price target to $13 from $8, citing improved quarterly performance and expanded self-help initiatives. This comes despite a 4% decline in store traffic in Q2 (Evercore ISI).
• Kohl's is requesting extra time to settle some invoices with vendors as part of its turnaround efforts and a reassessment of payment strategies (Bloomberg).
• Kohl's has launched FLX apparel for kids, expanding its proprietary activewear line with new, functional styles available online and in 300 stores. Further expansion is planned for 2026.
• The company raised its full-year 2025 earnings guidance. It is projecting a decrease in net and comparable sales but signaling improved profitability.

Valuation Changes

• Fair Value Estimate remains unchanged at $15.61 per share.
• Discount Rate holds steady at 12.5%.
• Revenue Growth forecast is virtually stable, with a marginal improvement from -1.60% to -1.60% year-over-year.
• Net Profit Margin has risen slightly, increasing from 1.32% to approximately 1.32%.
• Future P/E Ratio is essentially unchanged, moving narrowly from 12.71x to 12.68x.