A Call For Kors to Go Even Higher

Michael Kors Holdings Ltd. (NYSE: KORS) has been on a tear since coming public. The luxury apparel and accessories designer and retailer continually leads the same-store sales results from retail chains each month with massive gains, and its stock has been an amazing performer as it is now up more than 150% from its $20 IPO price from last December to around $52.00 now.

We also are seeing one call this morning with the expectation that shares will go even higher as its chart is on an uptrend.

Zacks Investment Research has a Zacks #1 Rating (Strong Buy) after a 70% earnings surprise on a 71% sales gain. The report noted, "This well-known global luxury brand is riding on the success of its multi-channel strategy, unique design and strong infrastructure." Even with a forward P/E ratio of almost 37, Zacks says that the valuation premium is "justified and well supported by its long-term estimated EPS growth rate of 32.1%" as its return on equity of 33.0% (against 20.6% for peers) suggests that it actively and efficiently reinvests its earnings compared to its peer group.

Kors shares closed at $52.09 on Friday and the post-IPO range is 23.51 to $52.75. Keep in mind that the market capitalization is now $10 billion.

JON C. OGG


Filed under: 24/7 Wall St. Wire, Analyst Calls, Apparel, Retail Tagged: KORS
Read Full Story

Markets

DJIA 26,743.50 86.52 0.32%
NASDAQ 7,986.96 -41.28 -0.51%
NIKKEI 225 23,869.93 195.00 0.82%
HANG SENG 27,953.58 475.91 1.73%
DAX 12,430.88 104.40 0.85%
USD (per EUR) 1.18 0.00 0.01%
USD (per CHF) 0.96 0.00 0.02%
JPY (per USD) 112.56 0.01 0.00%
GBP (per USD) 1.31 0.00 0.01%