Kohl's (KSS) is expected to lift its full-year earnings guidance amid indications of solid fiscal Q2 sales trends, UBS Securities said Monday in a report.

UBS raised its Q2 adjusted earnings estimate by $0.08 to $0.61 a share, topping the Wall Street consensus by $0.03. Kohl may increase its full-year EPS forecast to the range of $1.10 to $1.70 from $1 to $1.60, the report said.

Industry data shows Q2 net sales growth accelerated 430 basis points to 0.6% from a year earlier after a 3.7% decline in Q2, the report said. UBS research also found Google searches for Kohl's website rose 26% from a year earlier.

The market will be focused on Q3 sales trends, inventory levels, consumer confidence, and the credit outlook, among other areas, UBS said.

Q2 results are expected Aug. 26.

UBS has a sell rating on Kohl's stock and a $9 price target.

Price: 152.57, Change: +0.55, Percent Change: +0.36