Expected Price Gains at Mall Department Stores (M, JWN, KSS, JCP, SKS, DDS, SHLD)

A couple of weeks ago we looked at implied share price gains at several retailers, and today we’ll take a more focused look at mall anchor stores. Three retailers from our previous survey are included: Macy’s Inc. (NYSE: M); Nordstrom Inc. (NYSE: JWN); and Kohl’s Corp. (NYSE: KSS). We’ve added J.C. Penney Co. (NYSE: JCP), Saks Inc. (NYSE: SKS), Dillard’s Inc. (NYSE: DDS), and Sears Holdings Corp. (NASDAQ: SHLD).

In just two weeks, the target prices for Macy’s, Nordstrom’s, and Kohl’s have all changed. Macy’s and Kohl’s have had their targets reduced, while Nordstrom’s has risen. The likely reason is for the better outlook for higher-end retailers like Nordstrom. Macy’s Bloomingdale’s stores are expected to do better as well during the holiday season, but the impact on Macy’s overall revenues and earnings isn’t as decisive.

Saks, Dillard’s, Penney’s, and Sears have all broken through the most recent target prices posted at Yahoo! Finance. Either analysts have stopped caring or the shares are over-achievers, at least for the time being.

All data from Yahoo! Finance. Current share price info gathered just before noon today.

Macy’s Inc. (NYSE: M) has a median target price of $34.00 from 13 brokers. Shares are trading today at $31.81, for an implied gain of $2.19, or 7%. Macy’s forward P/E is 10.45 and the company pays a dividend yield of 1.3%. The stock’s 52-week trading range is $21.69-$31.35, and at today’s price that’s about 46% above its 52-week low, posted earlier this morning, and just 2% below the 52-week high. Macy’s has forecast total revenue growth of 4.5% for the year, with growth at its Bloomingdale’s stores up 7%. That’s not as healthy as it sounds, though, because total sales were up more than 6% year-to-date through September, indicating that holiday sales growth won’t be as robust as the rest of the year.

Nordstrom Inc. (NYSE: JWN) has a median target price of $54.00 from 20 brokers. Shares are trading today at $51.52, for an implied gain of $2.48, or 5%. Nordstrom’s forward P/E is 14.36 and the company pays a dividend yield of 1.8%. The stock’s 52-week trading range is $37.28-$53.35, and at today’s price that’s about 38% above its 52-week low, posted earlier this morning, and just 3% below the 52-week high. Nordstrom’s shares posted a new 52-week high earlier this week and is well within reach of another if October sales come in substantially higher than expected. The company’s position as a high-end retailer should attract more holiday traffic and more sales.

Kohl’s Corp. (NYSE: KSS) has a median target price of $61.50 from 18 brokers. Shares are trading today at $53.71, for an implied gain of $7.79, or 14.5%. Kohl’s forward P/E is 10.48 and the company pays a dividend yield of 1.9%. The stock’s 52-week trading range is $42.14-$58.00, and at today’s price that’s about 27% above its 52-week low, posted earlier this morning, and 7% below the 52-week high. Kohl’s shares are up more than $3 since our last look at the company just two weeks ago. The company has added a total of 38 new stores since January, and that ought to drive nicely higher revenue. Kohl’s is also upping its seasonal hiring by 5% over last year, adding 40,000 temporary workers for this holiday season.

J.C. Penney Co. (NYSE: JCP) has a median target price of $28.00 from 11 brokers. Shares are trading today at $33.18, nearly 16% above the target price. Penney’s forward P/E is 4.37 and the company pays a dividend yield of 2.4%. The stock’s 52-week trading range is $23.44-$41.00, and at today’s price that’s about 42% above its 52-week low, posted earlier this morning, and 19% below the 52-week high. Penney’s has sold off another 15 of its outlet stores as it continues on a path to close all of them by the end of next year. The company also recently acquired the Liz Claiborne brand and announced a $900 million share buyback. Even though the share price has broken through the median target price, it is still well short of its 52-week high.

Saks Inc. (NYSE: SKS) has a median target price of $11.00 from 9 brokers. Shares are trading today at $11.15, about 1.4% above the target price. Saks’ forward P/E is 22.32 and the company does not pay a dividend. The stock’s 52-week trading range is $7.67-$12.97, and at today’s price that’s about 45% above its 52-week low, posted earlier this morning, and 14% below the 52-week high. Saks is on track to double its full-year EPS this year, from $0.19 last year to $0.39 this year. Like Nordstrom’s, Saks is a higher-end player and those customers are expected to spend more this holiday season. Shares are down more than -5% today, though, on no news.

Dillard’s Inc. (NYSE: DDS) has a median target price of $52.50 from just 2 brokers. Shares are trading today at $52.52, fractionally above the target price. Dillard’s forward P/E is 11.84 and the company pays a dividend yield of 0.4%. The stock’s 52-week trading range is $25.31-$61.08, and at today’s price that’s about 108% above its 52-week low, posted earlier this morning, and 14% below the 52-week high. Dillard’s stock price has doubled in the past 12 months, setting an all time high for the company in July. Analysts seem completely underwhelmed by the company’s performance. The outlook calls for continued growth through the holiday season. What’s not to like here?

Sears Holdings Corp. (NASDAQ: SHLD) has a median target price of $44.00 from just 3 brokers. Shares are trading today at $79.40, nearly 45% above the target price. Sears’ forward P/E is negative and the company does not pay a dividend. The stock’s 52-week trading range is $51.14-$94.79, and at today’s price that’s about 55% above its 52-week low, posted earlier this morning, and 16% below the 52-week high. Sears has struck deals to sell Craftsman brand tools through Ace Hardware stores and Costco Wholesale Corp. (NASDAQ: COST) stores. The company suffers from a poor customer service reputation and low customer loyalty. Sears’ estimated EPS loss for the full fiscal year is now set at -$1.48, half a buck worse than expected just three months ago. Until the shares get closer to the 52-week high, no one is going to care much about target prices.

Paul Ausick