Oppenheimer Reaffirms Their Buy Rating on Michael Kors

By Ryan Adsit

In a report released yesterday, Anna Andreeva from Oppenheimer maintained a Buy rating on Michael Kors (NYSE: KORS), with a price target of $74. The company’s shares closed yesterday at $66.96, close to its 52-week high of $67.02.

Andreeva noted:

“Since November print, KORS is up ~40% (SPX up 8%) although still far from expensive at 15-16x (in line with our coverage) on what should be upwardly biased FY18/19 estimates (modestly raising F3Q18, FY18/’19 to $1.35E and $4.10/$4.20E). In this note, we take a look at near- and longer-term P&L drivers; while CHOO’s higher expense structure will pressure the P&L (SG&A rate 12-14% higher than KORS’), after adding ~$1B in expenses over the last few years, spending for core business should begin to roll off while productivity in NA wholesale should also be close to bottoming; at low 20s EBIT margin (similar to TPR targets, we think reasonable for a handbag manufacturer), KORS’ earnings power is in ~$7 range, we estimate. Raising PT to $74 (from $62).”

According to TipRanks.com, Andreeva is a 4-star analyst with an average return of 6.6% and a 54.7% success rate. Andreeva covers the Services sector, focusing on stocks such as Lululemon Athletica Inc, Ascena Retail Group, and Abercrombie Fitch.

Currently, the analyst consensus on Michael Kors is Moderate Buy and the average price target is $63, representing a -5.9% downside.

In a report released yesterday, Susquehanna also reiterated a Buy rating on the stock with a $80 price target.

The company has a one-year high of $67.02 and a one-year low of $32.38. Currently, Michael Kors has an average volume of 2.27M.

Based on the recent corporate insider activity of 30 insiders, corporate insider sentiment is negative on the stock. Most recently, in December 2017, Pascale Meyran, the SVP HR of KORS sold 6,835 shares for a total of $410,168.

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Michael Kors Holdings Ltd. engages in the design and distribution of sportswear, accessories, footwear and apparel of branded women’s apparel and accessories and men’s apparel bearing the Michael Kors trade name. The company operates its business through three segments: Retail, Wholesale and Licensing.