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BofA analyst Lorraine Hutchinson slashed the rating on Kohl’s (NYSE:KSS) from ‘Neutral’ to ‘Underperform’ to reflect weak demand.
The price target is nearly cut in half – to $26 from $50 – while Macy’s (NYSE:M), Nordstrom (NYSE:JWN), and Dillard’s (NYSE:DDS) also saw their price objectives slashed.
“We are reducing our F22 estimates by 16% on average for the department store group to reflect lower sales, as inflation is pressuring consumption and the associated gross margin headwind from inventory build-ups. We are also cutting our POs by 35% to reflect lower multiples given the difficult macro picture,” Hutchinson explained to clients in a note.
The analyst added that she has been negative on KSS for some time but decided to stay Neutral “given the possibility of a take-out.”
“With a deal off the table, we see risk to estimates and the stock from here,” Hutchinson added.
Kohl’s shares are down over 2% today.
