Analysts' Actions: Kohl's, Pitney Bowles, Rockwood

NEW YORK (TheStreet) -- RATINGS CHANGES

Kohl's (KSS) was upgraded to buy at TheStreet Ratings.

Pitney Bowes (PBI) was upgraded to buy at TheStreet Ratings.

Rockwood (ROC) was upgraded at Goldman Sachs to buy from neutral. Twelve-month price target is $89. Recent weakness has created a buying opportunity, Goldman said.

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Now let's look at TheStreet Ratings' take on Kohl's.

TheStreet Ratings team rates KOHL'S CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate KOHL'S CORP (KSS) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • 36.76% is the gross profit margin for KOHL'S CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 3.07% is above that of the industry average.
  • The debt-to-equity ratio is somewhat low, currently at 0.82, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.27 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 6.7%. Since the same quarter one year prior, revenues slightly dropped by 3.1%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • KOHL'S CORP's earnings per share declined by 9.1% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, KOHL'S CORP reported lower earnings of $4.07 versus $4.20 in the prior year. This year, the market expects an improvement in earnings ($4.27 versus $4.07).

This article was written by a staff member of TheStreet.

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