) to buy from hold.
On Thursday the company posted 3.2% lower September same store sales. Analyst Wayne Hood says the stock weakness is overdone. He notes the stock sank 9% Thursday vs. the S&P 500's 3.5% rise, down 37% from the $79 52-week high. He believes Kohl's could trade at a five-year average relative multiple of 1.8 times the market value, compared with the recent level below the five-year average range of 1.60-1.93 times the market value.
He says, based on talks with management, sales are rebounding on the back of cooler weather. Due to recent sales weakness, however, Hood cut the $1.87 fiscal 2003 (Jan.) earnings per share estimate to $1.82, and cut the $2.23 fiscal 2004 estimate to $2.19. He also cut the $73 target to $59.