The analyst firm lowered its 2015 EPS estimates for the department store operator to $4.60 a share from its previous estimate of $4.65 a share. BMO also lowered its 2016 EPS estimates for Kohl's to $5.18 a share from $5.25 a share.
BMO analysts said the lower price target and EPS estimates were due to the store's traffic and sales falling short of expectations.
"Despite the EPS beat and results that were in line with internal expectations, the stock traded down ~13% following the print, as 1.4% first quarter comp and flat traffic were lower than expected following 3.7% comp and 2% traffic growth in 4Q14," the analysts wrote. "The results led to concerns about the slope and consistency of the recovery in sales and traffic."
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 multiple strengths, 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 solid stock price performance, growth in earnings per share, increase in net income, revenue growth and reasonable valuation levels. We feel its strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- KOHL'S CORP has improved earnings per share by 5.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, KOHL'S CORP increased its bottom line by earning $4.26 versus $4.07 in the prior year. This year, the market expects an improvement in earnings ($4.55 versus $4.26).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Multiline Retail industry average. The net income increased by 1.6% when compared to the same quarter one year prior, going from $125.00 million to $127.00 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 2.2%. Since the same quarter one year prior, revenues slightly increased by 1.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- You can view the full analysis from the report here: KSS Ratings Report