Sterne Agee Raises PT On Kohl's To $62

Sterne Agee has published a research report on Kohl's Corporation (NYSE: KSS) after the company reported solid execution and an upside to original guidance during its 4Q.

In the report, Sterne Agee writes "Metrics underlying 4Q10 SSS of 4.3% included a 5.3% increase in transactions, a 1.1% decline in UPT, & flattish AUR. Ecommerce increased almost 60% y/y, contributing 200 bps to the comp & now comprises 4% of sales. GPM of 36.8% increased 39 bps y/y, reflecting the increased private label/exclusive penetration, (~300bps y/y, 48% of sales), and continued system's improvements. SG&A of $1,242M (+4.1% y/y) levered 37 bps due to leverage on payroll, corporate exp offsetting lessened credit income & higher IT expenses. Incremental EBITDA margins grew 29% as comps in excess of plan provided accretion. Inventories grew 1.7% psf (230 bps below sales) as KSS utilizes size optimization (80% of receipts) and other inventory mgmt initiatives."

Sterne Agee maintains its Buy rating and has raised the price target to $62.

Kohl's Corporation closed Friday at $53.24.