#7 - Kohl's (NYSE:KSS)
Rounding out the list is Kohl's (NYSE: KSS) which has all the look of a stock that is ready to breakout from its 52-week high that it established in March 2021. Typically when a stock begins to show a breakout pattern at a 52-week high, it’s a sign for investors that the stock is about to move significantly higher. However, at the moment, KSS stock is bumping up against its consensus price target.
Kohl’s is another chain of stores that has a “cult following.” But it appears that this loyalty is a strong growth driver. The company had a blowout report by any measure.
The company reported adjusted earnings of $2.48 per share. That more than doubled the consensus forecast of $1.21 per share. Revenue was also up 38.5% from the prior quarter at $4.45 billion. And all of this was supported by strong guidance that suggests net sales could grow by a low 20% rate.
About Kohl's
Kohl's Corporation operates as an omnichannel retailer in the United States. It offers branded apparel, footwear, accessories, beauty, and home products through its stores and website. The company provides its products primarily under the brand names of Croft & Barrow, Jumping Beans, SO, Sonoma Goods for Life, and Tek Gear, as well as Food Network, LC Lauren Conrad, Nine West, and Simply Vera Vera Wang.
Read More - Current Price
- $14.17
- Consensus Rating
- Reduce
- Ratings Breakdown
- 0 Buy Ratings, 7 Hold Ratings, 3 Sell Ratings.
- Consensus Price Target
- $17.22 (21.5% Upside)
Investors look to the retail sector to better understand consumer spending. Consumer spending drives nearly 70% of economic growth. And that would be one reason for consumers to be concerned. The monthly report from The University of Michigan’s consumer sentiment index showed a reading of 70.2. This was a large decline from the July reading of 81.2. However, perhaps more concerning is that analysts were expecting a number of 81.3.
There are some analysts who believe this is a result of a panic-induced “one-off” based on variables like concern over the Delta variant. And historically, a large drop in consumer sentiment has been a bullish indicator for stocks.
However, past performance is not always predictive of the future. In this case, inflation is one concern that could weigh down consumer sentiment. The prices of many everyday purchases are increasing. And if that curtails spending in other discretionary areas, it could have a bearish impact on retail stocks.
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