Kohl’s Tanks on BofA’s Double Downgrade Citing Supply Chain Issues By Investing.com
[ad_1]
By Dhirendra Tripathi
Investing.com – Kohl’s stock (NYSE:) plunged 14% Thursday after BofA (NYSE:) analyst Lorraine Hutchinson lowered the stock’s rating by two notches due to supply chain issues.
According to the analyst, the target price was lowered from $75 to $48, a reduction of 36%. In the current session, the stock dropped below the target price and touched a low of $45.91.
Hutchinson pointed out that the retailer’s top performing active brands like Nike (NYSE:), Under Armour (NYSE:), Adidas (OTC:), and Champion are facing supply chain issues. The product flow is slow. She warned investors that the second half will be difficult.
Second-quarter inventory was down approximately 25% compared to 2019, with women’s down substantially more, as per the analyst. She said while Kohl’s is working to address the situation, conditions only worsened. She noted that this puts at risk the guidance for 2021’s high end.
It was only last month that Kohl’s raised its guidance for the financial year. The new expectation is that net sales will rise in the mid-20s percent range, down from the earlier expectations of the high teens to low teens percentage range.
The adjusted earnings per share for the midpoint are $5.95, as opposed to $4 in the middle.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Trading the financial markets is the most risky investment form. Please make sure you are fully aware of all the costs and risks involved.
[ad_2]