Kohl’s (KSS) stock has recently experienced significant volatility, characterized by notable momentum swings and meme stock-like trading patterns that have largely disconnected the share price performance from its fundamental metrics. While KSS is up a staggering 42% in the past month alone, the surge in its stock price has primarily been driven by retail investor interest in potential short squeeze conditions rather than fundamental business improvements.
On the charts, KSS is currently trading near a 50% retracement of its 52-week high and low. The shares are no longer technically overbought, based on the 14-day Relative Strength Index (RSI), and daily trading volume has tapered off considerably from the late-July peaks.
Ahead of the upcoming earnings report from Kohl’s, due out before the market opens next Wednesday, Aug. 27, the options market is pricing in a bigger-than-usual price swing for the retail stock. Currently, KSS options expiring next Friday reflect expectations for a post-earnings move of 13.07% in either direction, compared to the stock’s average earnings reaction of 10.70% over the past four quarters.
Kohl’s recently received an upgrade from Gordon Haskett, which revised their rating on KSS to “Hold” from “Reduce,” though the broader analyst consensus among 13 experts in coverage is a “Moderate Sell.” UBS maintains a “Sell” rating with a $4.00 price target, citing channel checks that indicate softer Q2 sales trends.
For income investors, the retailer continues to demonstrate its commitment to shareholder returns by declaring a quarterly dividend of $0.125 per share, representing an attractive yield of approximately 3.67%. Trading at a price-to-book ratio of 0.38, market indicators suggest the stock may be significantly undervalued, though investors should weigh this appealing valuation against ongoing operational challenges.
Rising tariffs are creating pricing pressures across the retail industry, forcing companies to carefully balance pricing strategies against consumer sensitivity. The broader retail environment presents additional challenges for Kohl’s, with consumer spending patterns showing increasing disparity between income groups and overall retail sector performance displaying mixed signals. The combination of economic uncertainty, inflation concerns, and shifting consumer preferences continues to create a challenging operating environment.
