Michael Kors: 2Q Could See Upside, But Stock Needs Reset Catalyst, Says Deutsche Bank

In a research report published today, Deutsche Bank analyst Dave Weiner reaffirmed a Buy rating on Michael Kors (NYSE:KORS) with a $95 price target, ahead of the company’s 2Q’s Tuesday earnings release. 

Weiner noted, “With KORS stock off 4% since 1Q’s report (but also +9.9% since its Oct. 17 bottom vs. +4.3% for the rest of our coverage), the set-up in to Tuesday’s print is tricky. While we believe that expectations have moderated a lot YTD and that LT rev./GM shift opportunities remain underappreciated (i.e. to retail, to Europe/Asia, to men’s), we realize that some investors have cooled on the story right now. That said, we believe mgmt. can catalyze the stock with specifics that the brand (ST+LT) (1) is growing strongly in NA, (2) can be global (v. most peers are not), (3) won’t devolve to promos. Trim out-qtrs. on weak € & SG&A build, but reiterate BUY as KORS only trades @ 16.4x F16 v.15-20% CAGR.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Dave Weiner has a total average return of 6.6% and a 51.7% success rate. Weiner has a 1.8% average return when recommending KORS, and is ranked #1090 out of 3355 analysts.

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