Sterne Agee Raises PT On Kohl's To $62

Sterne Agee has published a research report on Kohl's Corporation 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.