Kohl’s (KSS) Valuation in Focus as Analysts Brace for Earnings Declines and Shifting Consumer Trends

Kohl's (NYSE:KSS) is back in the spotlight as investors and analysts brace for its upcoming quarterly earnings, expected to show both revenue and profit under pressure. With consumer sentiment still shaky and digital sales facing headwinds, the market’s attention has zeroed in on how Kohl’s will manage through these crosscurrents. As earnings approach, the buzz isn’t just about short-term numbers, but also whether the retailer’s strategy, particularly partnerships and newer categories, can reshape its outlook for the rest of the year.

It’s been a choppy ride for shareholders, with Kohl’s stock down 24% over the past year and a disappointing return since the start of 2025. A modest run in recent weeks pulled shares up nearly 9% in the past month, but momentum remains tentative as skepticism around the retailer’s growth prospects builds. Dividend affirmations and new options activity have provided some talking points, yet the broader story is still one of shrinking sales, uneven digital results, and ongoing questions about long-term positioning in an evolving retail landscape.

With earnings just around the corner, the debate now is clear: does this reset in expectations open up value, or is the market accurately reflecting the risks ahead for Kohl’s?

Most Popular Narrative: 59.1% Undervalued

According to the narrative by woodworthfund, investors are significantly undervaluing Kohl's shares by pricing in a level of risk that the author argues does not reflect the retailer's underlying fundamentals, such as strong real estate assets and declining debt.

It is not an exaggeration to say that the cost of Kohl’s taking itself private at these levels would be less than the cost of going through the bankruptcy process. This makes the prospect of Kohl’s going out of business in the near term somewhat irrational. Investors have focused on store closures when, in reality, management is trimming the fat, with their remaining stores (over 1,100) nearly all profitable. Most Americans still live within 15 miles of a Kohl’s store.

What really drives this bold valuation? There is a key financial engine at the heart of this fair value perspective. Woodworthfund's narrative points to major assumptions, such as future profit acceleration and asset strength, that could surprise investors. Which unexpected factors does this outlook depend on? Explore the foundation of their noteworthy target by examining the numbers that may deserve a closer look.

Result: Fair Value of $34 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, ongoing revenue declines and skepticism about future consumer demand pose real threats. These factors could undermine this bullish valuation outlook.

Find out about the key risks to this Kohl's narrative.

Another View: SWS DCF Model Suggests Even Deeper Value

While the earlier valuation points to undervaluation based on assets and projected profits, our DCF model sees even greater upside potential. This approach weighs future cash flows and raises the question: are investors overlooking a bigger opportunity?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Kohl's for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Kohl's Narrative

If you think there is another story to tell or want to dive into the data yourself, you can piece together your own take in just a few minutes. do it your way.

A great starting point for your Kohl's research is our analysis highlighting 3 key rewards and 6 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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