Signet Jewelers Limited (SIG) Vs. Kohl’s Corporation (KSS): Updated Outlook

Signet Jewelers Limited (NYSE: SIG) shares are -26.91% down in the year-to-date (YTD) period and have moved 1.86% or $0.29 higher in the latest trading session. However, stock’s trailing 12-month performance remains nearly +183.74% lower. Comparatively, the stock is -49.46% down YTD and 34.09% over the trailing 3-month period. If we look at the shorter duration, its week performance is 10.35% and 37.93% over the month.

Analyst Recommendations

On March 27, 2020, BofA/Merrill recommended the SIG stock is a Underperform, while earlier, Telsey Advisory Group had Reiterated the stock as a Market Perform on June 05, 2020. 5 analysts offering the recommendations for the stock have a consensus rating of 3.80 to suggest that the SIG stock is a “Hold. 2 of the 5 analysts rate the stock as a “Sell”, while 1 has rated it as “Underweight”. 0 recommend buying, with 0 rating it as an Overweight.

The stock currently trades at $15.89 and analysts tracking its performance over the next 12 months have a consensus estimate price target of $9.00. The forecasts give the Signet Jewelers Limited stock a price target range of $15.00 on the higher side while at least one analyst think the stock could plunge to a low of $5.00. The two limits represent an downside potential of -5.93% or -217.8%.

Earnings Forecast

Analysts estimate the earnings to increase 43.60% in the current quarter to -$1.95, down from the $0.51 reported in the same quarter a year ago. For the current year, earnings should grow to an average of -$2.09, down -24.70% from $3.88 reported last year. Analysts also offered guidance for the next financial quarter, with their average projected EPS at between -$1.64 and -$0.85. Wall Street estimates earnings per share to be at an average of $1.87 for the next year.

Insider Transactions Summary

According to SEC data, total insider shares purchases at the company stands at 78 over the last 12 months, while SEC filings reveal that there have been 51 insider sales over the same period. Insiders have purchases 1,127,885 shares while those sold by company executives and officers stand at 51,072. The last 3 months have seen insiders trade a total of 118,756 and 25,577 in purchases and sales respectively.

Hilson Joan M, a Chief Financial Officer at the company, bought 7,500 shares worth $64275.0 at $8.57 per share on Mar 27. The Director had earlier bought another 12,235 SIG shares valued at $98908.0 on Mar 27. The shares were bought at $8.08 per share. Edelman Oded bought 35,000 shares at $8.53 per share on Mar 27 for a total of $0.3 million while Drosos Virginia, (Chief Executive Officer) bought 4,000 shares on Sep 06 for $56574.0 with each share fetching $14.14.

Kohl’s Corporation (NYSE:KSS), on the other hand, is trading around $20.62 with a market cap of $3.27B and analyst research firms have a positive stance on its shares. Analysts predict that the stock will reach $21.00 and spell out a more modest performance – a 1.81% return. Some analysts are even forecasting -$3.3 per share in earnings this year on a short term (1 year) basis.

Let us briefly look at the Kohl’s Corporation (KSS) financials, with a focus on its operating details as indicated in its earnings report for the last quarter.

Company balance sheet and cash flow

KSS’s operating margin was positive on the trailing 12 months basis, remaining steady at 6.00%, while the operating expenses over the recent quarter were at $1.36 billion. This represented a 44.03% of the company’s total revenues which amounted $2.43 billion. With this in place, we can see that the company’s diluted EPS declined -$3.52 on the year-over-year period, growing to $0.38 as given in the last earnings report.

In terms of the balance sheet & cash flow as of (Oct 2020), the total assets figure advanced to $15.87 billion from $14.55 billion over the previous quarter. The cash flow from operating activities totaled $53.0 million, significantly lower than the $136.0 million reported in the year-ago quarter. The company’s free cash flow for the quarter was -$109.0 million.

Insider activity

Insiders have transacted a total of 62 times at Kohl’s Corporation over the last 6 months, with insider purchases undertaken 38 times and accounting for 720,622 shares. Insider sales totaled 157,248 shares over the same period, with these deals completed in 24 transactions. Looking at these numbers, we realize that net purchases over that period are 14.0 shares. Insiders now hold a total of 1.76M shares after the latest sales, with 69.60% net shares purchased.

Major holders

Insiders own 0.90% of the company shares, while shares held by institutions stand at 85.10% with a share float percentage of 156.09M. Investors are also buoyed by the number of investors in a company, with Kohl’s Corporation having a total of 810 institutions that hold shares in the company. The top two institutional holders are Vanguard Group, Inc. (The) with over 16.94 million shares worth more than $351.86 million. As of Jun 29, 2020, Vanguard Group, Inc. (The) held 10.74% of shares outstanding.

The other major institutional holder is Blackrock Inc., with the investment firm holding over 11.91 million shares as of Jun 29, 2020. The firm’s total holdings are worth over $247.34 million and represent 7.55% of shares outstanding.