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Kohl's (KSS) Downgraded to 'Hold' By Deutsche Bank; PT Reduced to $45

 November 30, 2012 01:47 PM

(By Balachander) Kohl's Corp. (NYSE: KSS) shares were downgraded to "hold" from "buy" and price target lowered to $45 from $62 by Deutsche Bank (DB).

"KSS once again posted very soft, arguably unacceptable SSS in Nov. with a down 5.6 percent print – instilling fears that the modest improvement we saw in July-Oct. was not trend worthy," the bank said. "Quite similar to last Nov., KSS SSS was once again a debacle – down 5.6 percent YOY compared to our +2.0 percent est."

"Importantly, while we don't think the rest of 4Q will be as bad (as Nov.), it's 100 percent hard to defend the stock with so many structural issues at play," DB wrote.

[Related -Sears Holdings Corp (SHLD): This Retailer Might Be The Worst Investment You Can Make Right Now]

"Complicating matters, Street est's are materially too high for 4Q12 and ‘13 – the latter of which we think could approach $4.00-$4.25, suggesting further downside in the stock," the bank added.

"Also, with each region negative, it was clearly not just Sandy that derailed the sales plans," DB said. "Finally, with retail promotional activity likely to intensify (post Nov. SSS) Kohl's will have a more challenging time delivering on its original goals."

The stock, which has been trading in the 52-week range of $42.72 to $55.25, slid 0.91 percent to trade at $44.61 on Friday.

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