Kohl’s Corp. (KSS
) resides in the consumer cyclical sector that is home to companies engaged in retail operations and services, as well as the production of automobiles, homebuilding, household goods, textiles and apparel, to name a few.
According to a sector review last week, Schwab boosted its rating on the consumer discretionary sector “to outperform from marketperform.” This year Schwab has been optimistic about consumers, commenting in the review: “Despite some much-understood handwringing over the state of the consumer, the labor market continues to improve, confidence among consumers appears to be rising, and housing has been steadily adding to many Americans' net worth over the past couple of years. And with what we believe continues to be some pent-up demand in the pipeline, the possibility of consumer discretionary stocks outperforming is very real. Additionally, on the company side of the ledger, we continue to see businesses aggressively manage their costs, while also seeming to better control their inventory in an attempt to maximize their profits. Finally, we believe the recent rise in oil prices largely due to Middle Eastern concerns will be short lived, and that the pullback we see coming will provide a further tailwind to consumers.” Continue Reading »