UBS Doubles Down on Kohl’s Sell Rating, Sees Long Road Ahead Despite New Initiatives

UBS has reaffirmed its Sell rating on Kohl’s (NYSE:KSS) and maintained a $5.00 price target, signaling continued skepticism about the retailer’s turnaround efforts. The company’s shares saw a 24% plunge intra-day today following the company’s announcement on store closure plans.

Following a recent meeting with company leadership, UBS acknowledged management's urgency and early moves to spark growth. However, the firm expressed doubts that these steps will be sufficient to stem market share losses, especially to more competitive segments like off-price retailers.

UBS remains concerned about Kohl’s ongoing struggles with pricing, merchandise appeal, and customer service, areas where rivals are gaining ground. Despite a refreshed strategy, the firm sees limited evidence that Kohl’s can reverse its trajectory in the near term.

Looking forward, UBS projects a 12% compound annual decline in earnings per share over the next five years, citing competitive pressures and weak fundamentals. The firm believes disappointing earnings results over the next twelve months could push shares closer to its bearish price target.