Kohl's Stock Pops After Buyout Bids Roll In

Analysts are still hesitant toward the long-stranding department store name

Deputy Editor
Jun 3, 2022 at 9:33 AM
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Kohl's Corporation (NYSE:KSS) is jumping ahead of the bell, last seen 3.3% higher to trade at $42.55, after a Wall Street Journal report revealed the retailer officially received takeover bids. Specifically, private equity firm Sycamore Partners placed an offer in the mid-$50s per share, while retail holding name Franchise Group (FRG) bid about $60 per share.

The long-stranding department store's shares have traded tumultuously over the course of 2022, thanks to ongoing buyout rumors. Annual highs of $64.38 in January were followed by roughly two-year lows of $34.64 by late May, with pressure from the 20-day moving average guiding shares lower since April. Year-to-date, the equity is down 16.6%.

Analysts have yet to weigh in on the news, though there is plenty of room for upgrades that could provide tailwinds for Kohl's stock. In fact, six of eight covering analysts carry a "hold" or worse rating. Meanwhile, there is short-covering potential as well, with short interest representing 8.6% of the stock's available float, or over three days' worth of pent-up buying power. 

It's also worth noting that options traders have been much more bearish than usual in the last two weeks. Over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), KSS sports a 10-day put/call volume ratio of 1, which stands higher than 72% of readings from the past year. 


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