Kohl’s shares higher on Amazon partnership

Kohl’s shares could rally 50% from ‘win-win’ partnership with Amazon

Kohl's shares could rally 50% from 'win-win' partnership with Amazon. Stockwinners.com
Kohl’s shares could rally 50% from ‘win-win’ partnership with Amazon

Shares of Kohl’s Corp (KSS) rallied in morning trading after an analyst called the retailer’s partnership with Amazon (AMZN) a “win for both companies” and said Kohl’s stock could rise another 50% or more.

JEFFERIES ANALYST EXPRESSES OPTIMISM

Jefferies analyst Randal Konik raised his price target for Kohl’s stock to $100 from $66 and said the stock could rally at least another 50%.

In a note to clients, Konik asid Kohl’s is “addressing the digital revolution head on” and beating rivals with its emphasis on proprietary brands, rightsizing its square footage and its partnership with Amazon.

Konik said Kohl’s partnership with Amazon is “sleeping with the enemy,” but believes their agreement is a “win for both companies.”

He expects the pilot to roll out nationally, allowing Kohl’s stores to see stronger traffic and “a nice added convenience” for Amazon customers. Konik also said he expects Kohl’s sales growth to accelerate and margins to rise, and views current consensus estimates as “way too low.”

The company’s off-mall real estate is an additional positive, as is the closing of peer stores, Konik added.

WHAT’S NOTABLE

In order to combat weakness stemming from the increasing popularity of fast-fashion retailers and an increase in online shopping on sites like Amazon Kohl’s is currently offering free Amazon returns in 82 stores.

The retailer previously announced plans to roll out a “smart home experience” in 10 stores across the Los Angeles and Chicago areas.

Shoppers at these stories are able to purchase Amazon devices, accessories and smart home devices and services directly from Amazon.

Kohl’s said 1,000-square-foot “zones” within its stores will be dedicated to Amazon products, including the Echo, Echo Dot, Fire TV and Fire tablets.

Kohl’s has also partnered with Under Armour (UA, UAA), Nike (NKE) and adidas (ADDYY) to sell the companies’ shoes and apparel in Kohl’s stores.

Earlier this month, Kohl’s CEO told CNBC at ICR’s conference that the retailer plans to lease portions of its bigger stores to other retailers like grocery stores. The retailer is also testing smaller store formats of about 35,000 square feet.

PRICE ACTION:

Kohl’s is up 2.8% to $66.66 in morning trading.


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HSBC to pay more than $100M to resolve fraud charges

HSBC agrees to pay more than $100M to resolve fraud charges 

HSBC to pay more than $100M to resolve fraud charges. Stockwinners.com
HSBC to pay more than $100M to resolve fraud charges

HSBC Holdings (HSBC) has entered into a deferred prosecution agreement and agreed to pay a $63.1M criminal penalty and $38.4M in disgorgement and restitution to resolve charges that it engaged in a scheme to defraud two bank clients through a multi-million dollar scheme commonly referred to as “front-running,” the DOJ confirmed.

The DPA, which was filed in connection with a two-count criminal information charging wire fraud in the United States District Court for the Eastern District of New York, is pending review by the Court.

According to HSBC’s admissions, on two separate occasions in 2010 and 2011, traders on its foreign exchange desk misused confidential information provided to them by clients that hired HSBC to execute multi-billion dollar foreign exchange transactions involving the British Pound Sterling.

After executing confidentiality agreements with its clients that required the bank to keep the details of their planned transactions confidential, traders on HSBC’s foreign exchange desk transacted in the Pound Sterling for the traders and HSBC’s own benefit in their HSBC “proprietary” accounts.

In total, HSBC admitted to making profits of approximately $38.4M on the first transaction in March 2010, and approximately $8M on the Cairn Energy transaction in December 2011.

HSBC did not receive credit for voluntarily disclosing the misconduct.

HSBC received substantial cooperation credit because, although as detailed in the DPA, the bank’s initial cooperation with the government’s investigation was deficient in certain respects, after being notified of the Department’s concerns, HSBC changed course and its cooperation improved substantially.


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