Can Kohl's Stock Keep Rallying in 2018?

Back in June, shares of department-store giant Kohl's (NYSE: KSS) fell to around $35, near the stock's multiyear low. Investors were extremely worried that the rapid growth of off-price and e-commerce retailers would undermine Kohl's revenue and its gross margin.

At the time, I saw these fears as overblown and recommended buying Kohl's stock. Since then, the stock has come roaring back, rising by about 50%. Nevertheless, there could be plenty of additional upside for Kohl's stock, because of improving sales trends and the impact of tax reform. The apparent rebound in retail sales trends could also create plenty of upside for weaker department store chains such as J.C. Penney (NYSE: JCP).

Like most domestic retailers, Kohl's currently pays close to the full statutory corporate tax rate of 35%. It now seems likely that the statutory rate will fall all the way to 21%.

Source: Fool.com