WR Hambrecht downgraded Kohl's (KSS ), Target (TGT ) and Wal-Mart (WMT ) to hold from buy.
Analyst Bill Dreher thinks these companies will suffer a multiple contraction due to macro-economic uncertainty and eroding consumer confidence, combined with retail specific issues. He thinks the increasingly skeptical stock markets will respond by further compressing these companies' multiples for at least the next two months until consumer spending and the same-store sales picture clarifies.
Still, Dreher thinks fundamentals of these companies are superb, but won't be enough to overcome other macro and investor related issues. Dreher cut his $79 target to $68 for Kohl's, and cut Target's $35 target to $32. He also trimmed Wal-Mart's $53 target to $49.