UPDATE: UBS Investment Research Upgrades Kohl's on Improved 2014 Strategy

In a report published Monday, UBS Investment Research analyst Michael Binetti upgraded the rating on Kohl's (NYSE: KSS) from Neutral to Buy, and raised the price target from $54.00 to $69.00.

In the report, UBS Investment Research noted, “We're more confident that a multifaceted turnaround strategy (with real initiatives to re-focus on national brands, improve the loyalty program, boost beauty/accessory sales, reduce inventories) will drive upside to Street profit growth ests in ‘14 and ‘15. We believe the market will pay a higher P/E as Kohl's EPS algorithm shifts back to modest profit growth (vs P/E compression for 3-yrs with 100% of EPS growth from share repurchases and net income declines). We believe KSS new multifaceted strategy can drive consistent modest +3.5% EBIT growth in '14 & '15 based on: 1) SSS: +1.5%; 2) GM: +15bp/yr (avg); 3) EBIT margins returning to 9.8% (vs 9.5% in ‘13E, below prior peak of 11.6%). With share count 37% lower by ‘15E compared to 2010 levels, we forecast $5.30 in EPS by ‘15E (Street: $5.10 In an upside case, we show that simply returning to '10 net income (with ~$900m/yr in buybacks) could generate $6.00 in EPS by '15.”

Kohl's closed on Friday at $56.85.