Deutsche Bank Thinks Michael Kors` Stock is Going to Recover

By George MacDonald

In a report published on May 28, Dave Weiner from Deutsche Bank maintained a Buy rating on Michael Kors (NYSE: KORS), with a price target of $60. The company’s shares closed last Friday at $46.50, close to its 52-week low of $45.53.

Weiner said, “With the market looking for BOTH NA stabilization & continued intl. growth, the former in particular fell frustratingly short in 4Q. Primarily, -6.7% NA comps surprised to the downside, via tourism, the watch category, port delays, & a weaker handbag category. While the market sold on fears of a further brand slowdown, at this point, we remain at BUY as (a) F16 comp plan implies a 2Y/3Y decel. & should be reachable, (b) downside to $40 (10X x $4.00 EPS) from $45.93 (10.5x-10x $4.40-$4.50 plan) is attractive vs. upside if F16/17 materializes/normalizes. While the stock remains ‘wait & see’, valuation, low expectations, a still-strong LT global story & buyback support.”

Michael Kors has an analyst consensus of Hold, with a price target consensus of $61.10.

Based on Michael Kors` latest earnings report from March 31, the company posted quarterly revenue of $1.08B and quarterly net profit of $182.6M. In comparison, last year the company earned revenue of $917.5M and had a net profit of $161M.

According to TipRanks, Weiner is a 3-star analyst with an average return of 2.5% and a 57.4% success rate. Weiner covers the Consumer Goods sector, focusing on stocks such as Ralph Lauren Corp, Under Armour, and Perry Ellis.

Michael Kors Holdings Ltd is a designer, marketer, distributor and retailer of women’s apparel and accessories and men’s apparel. The Company’s business consists of retail, wholesale and licensing segments.