All in on Kohl's?

Kohl's Corp.  (KSS) - Get Kohl's Corporation (KSS) Report  reported a quarter in which it topped analysts' earnings expectations by 12 cents a share. But analysts at Morgan Stanley are concerned about the retailer's long-term growth. 

While Morgan Stanley raised the company's price target to $51 from its previous view of $45, it also maintained its "underweight" rating on the stock. 

The reason for the pessimism? 

Morgan Stanley analysts said they believe that it will be hard for the company to achieve its second-half same-store sales guidance. 

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"In our view, traffic growth is necessary to sustainably drive comp sales growth. We agree with Kohl's focus on driving traffic and admire its various initiatives such as its partnership with Aldi to increase footfall. However, we have not yet seen evidence that its strategies will be enough to sustainably drive positive traffic," analyst Kimberly Greenberger said. 

The firm, however, acknowledged that the company's fundamentals do leave room for optimism. 

"Over the past 5 trailing years, KSS has grown operating income y/y in 9 quarters (vs. 20 total quarters); however, it has only grown operating income once over that same period when it has had to lap a quarter with prior positive income growth," Greenberger wrote. "Lapping these periods of operating income growth would likely provide the evidence that we seek to suggest a sustainable turn around in operating profit growth is taking place and also imply that KSS has figured out how to grow, despite the various secular headwinds it faces."

Kohl's shares were rising 1.2% on Thursday to $80. 

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