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Kohl’s Tanks on BofA’s Double Downgrade Citing Supply Chain Issues By

© Reuters.

By Dhirendra Tripathi – 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.



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Mike Robinson
Mike covers the financial, utilities and biotechnology sectors for Street Register. He has been writing about investment and personal finance topics for almost 12 years. Mike has an MBA in Finance from Wake Forest University.