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Kohl's (KSS) Gains But Lags Market: What You Should Know

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In the latest trading session, Kohl's (KSS - Free Report) closed at $60.81, marking a +0.85% move from the previous day. The stock lagged the S&P 500's daily gain of 1.12%. At the same time, the Dow added 1.01%, and the tech-heavy Nasdaq lost 0.08%.

Prior to today's trading, shares of the department store operator had gained 12.04% over the past month. This has outpaced the Retail-Wholesale sector's gain of 5.08% and the S&P 500's gain of 4.63% in that time.

Kohl's will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.79, down 24.76% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $3.96 billion, up 1.83% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.16 per share and revenue of $19.92 billion. These totals would mark changes of -2.32% and +2.51%, respectively, from last year.

Any recent changes to analyst estimates for Kohl's should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Kohl's is currently sporting a Zacks Rank of #2 (Buy).

In terms of valuation, Kohl's is currently trading at a Forward P/E ratio of 8.43. Its industry sports an average Forward P/E of 8.43, so we one might conclude that Kohl's is trading at a no noticeable deviation comparatively.

Investors should also note that KSS has a PEG ratio of 1.05 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Retail - Regional Department Stores was holding an average PEG ratio of 1.05 at yesterday's closing price.

The Retail - Regional Department Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 8, which puts it in the top 4% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow KSS in the coming trading sessions, be sure to utilize Zacks.com.

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