PreMarket Prep Stock Of The Day: Kohl's

Benzinga's PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.

On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.

If you are skeptical about an analyst’s rating change having an impact on price action, then you may want to reevaluate that notion. Just observe Thursday’s price action in Kohl’s Corp KSS, which is the PreMarket Prep Stock Of The Day.

Short-Term Kohl's Price Action: Kohl’s post-pandemic high was made in May at $64.80 in the process of rebounding off its mid-month low of $50.64. Only three days ago (Monday), it was on a four-day winning streak when it peaked at $56.82 and retreated to end the session at $56.

In a weak tape on Tuesday, Kohl's swooned to $54.25 and was left out during Wednesday’s rally, as it declined to $53.66.

The Ax: Before the open Thursday, Bank Of America securities analyst Lorraine Hutchinson downgraded Kohl's from Buy to Underperform and announced a $48 price target. That price matches the last analyst commentary back on Aug. 24, when Morgan Stanley maintained its Underweight rating and nudged its price target from $47 to $48.

The analyst cited potential supply chain problems for the downgrade.

PreMarket Prep's Take On Kohl's: When the issue was being covered on the show, it was already deep in the red trading at the $48.50 area. Co-host Dennis Dick did not mince words in his opinion on the issue.

“Did Kohl’s having any business being over $60 in May? Were they really in better shape than before the pandemic started?” Dick said. He was referring to the issue ending 2019 at $50.95.

“Am I buying the dip in this one? No way, [I'm] not touching any brick and mortar stores in downtrends.”

The author of this article noted there was no monthly support until its July low ($46.56).

The full discussion on the issue from Thursday’s show can be found:here:

KSS Price Action: Kohl’s much lower open ($48.43 vs. $53.66) Thursday, turned out to be just about the high of the session, which is $48.65. The continuation move lower has taken the issue to $45.91.
That marks the lowest level for Kohl's since it bottomed on Feb. 3 at $44.35.

Since making that daily low, Kohl has rebounded above $47 and was trading down 11.37% at $47.57 Thursday afternoon.