Shares of Kohl’s Corp. gained 2.5 percent to $69.87 today after Robert W. Baird & Co. upgraded the department store’s stock based on attractive valuation and increased growth visibility – driven by the launch of its Vera Wang merchandise line.
“Reviews have been positive among industry observers who have seen previews of the line, which is likely to have many of the designer’s signature features,” said Baird analyst David Cumberland, who upped his rating to outperform from neutral. “Online commentary from customers suggests accessibility to Vera Wang products will attract new customers to Kohl’s.”
Cumberland also noted ongoing growth drivers such as continued store expansion and remodeling – in addition to new product launches, including Kohl’s introduction of Food Network kitchen products and ELLE apparel, both slated to hit stores in September.
“Kohl’s should continue to gain substantial market share in 2007, although we expect diminished incremental benefits from competitor store closings,” said Cumberland, which noted department store closings should moderate relative to the high levels of the past two years.