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Retailer Kohl's Is a Potential Target for Activist Investors

9/03/15 4:08 PM EDT
Department store operator Kohl's Corp. is a potential activist target, writes The Deal's Richard Collings, noting that the Menomonee Falls, Wis.-based retailer has become vulnerable to activist investors after its second quarter earnings miss. The company's shares closed at $50.89 on Wednesday, near the 52-week low of about $49. Shares were trading at $52.56 at 11:44 am on Thursday, up 3.28%. In the article, first published on The Deal on Wednesday afternoon, Collings also points to Kohl's valuable real estate. According to the company's latest 10-Q, filed on June 5 with the Securities and Exchange Commission, for the quarter ended May 2, Kohl's listed property and equipment valued at about $8.5 billion. That's a significant number, when contrasted with the company's market capitalization of around $10 billion. With a $10 billion market cap, Kohl's would have an enterprise value of $14.1 billion, when about $5 billion in debt is added and about $900 million in cash is subtracted. As Collings notes, that represents a multiple of only about 5.42 times the nearly $2.6 billion in adjusted Ebitda Kohl's generated during the fiscal year ended Jan. 31, 2015, according to Bloomberg data.
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