Goldman Sachs Reiterates Conviction Buy On Kohl's (KSS)

Goldman Sachs is reiterating its Conviction Buy rating on Kohl's Corporation (NYSE: KSS).

In a note sent to investors, Goldman writes, "In our view, the finalization of the ASR removes any lingering uncertainty around the timing of the $1bn share repurchase. The only leg of the capital allocation stool left unknown is the prospect of a dividend initiation, which should be announced on the company's 4Q conference call in February. Part of our Buy thesis for KSS hinged on the resumption of its share buyback. With the accelerated share repurchase news behind us, we believe investors can now focus attention back on the company's core operations, which we expect will post a bounce-back from October's weather-induced negative SSS performance. As comps revert back to the +2-4% range, we expect the company's multiple to expand beyond its current 12.3x our 2011E and back toward its two-year average of 15x. We reiterate our Conviction-Buy."

Shares of KSS are up 70 cents in pre-market trading to $53.50, a gain of 1.3%.