Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!

Did Deutsche Bank Just Call The Bottom In Michael Kors Shares?

Courtesy of Benzinga.

Did Deutsche Bank Just Call The Bottom In Michael Kors Shares?

Related KORS
Benzinga's Top Upgrades
Fast Money Traders Share The Stocks On Their Watchlist
When Stimulation No Longer Stimulates (Seeking Alpha)

Related COH
Earnings Recap For January 26
Investors Cheer Coach's Q2 Results, Guidance
When Stimulation No Longer Stimulates (Seeking Alpha)

With Michael Kors Holdings Ltd (NYSE: KORS) set to report earnings on Tuesday, February 2, before the opening bell, a handful of sell-side analysts have recently been out with 3Q expectation previews.

One analyst at Deutsche Bank, Dave Weiner, seemed to lean toward calling a bottom in the stock.

In the title of a Monday morning research note, Weiner ventured to speculate, “Near-term macro remains pressured, but KORS stock finding a bottom?”

Three Concerns Already Priced In

The Deutsche Bank analyst argued “a lot of bad news” has recently been priced into shares of the handbag maker. According to Weiner, investors have sidelined Michael Kors shares given:

  • a slowdown in North America;
  • pressure related to tourism; and,
  • lower average unit sales which stemmed from the sale of smaller-sized handbags.

Related Link: Handbag Category “Somewhat Slow” Post-Christmas

4 Potential Catalysts To Look Out For

Weiner continued, however, that catalysts for the company and stock “should re-emerge” during the first half of 2016.

He noted the following positives:

  • new products and a Fall product investor preview next week;
  • promotions which have normalized despite being up on a year-over-year basis;
  • the SG&A ramp which “should cycle in ’16″; and,
  • strong trends in China and interest in bringing that business in house.

Expectations For Q3

Weiner has modeled for Michael Kors to report a third-quarter improvement in overall same-store sales to a decline of 5 percent. He is expecting third-quarter earnings of $1.47, compared to the current analyst consensus estimate of $1.46.

“More importantly for the stock, management needs to indicate that positive comps are forthcoming, especially as Coach Inc (NYSE: COH) expects its own comps to inflect in the Apr.-Jun. quarter,” Weiner said.

Despite promotions, which were likely high over the quarter, Weiner has said Michael Kors’ gross margins will be in line.

Weiner and Deutsche Bank maintain a Buy rating and $50 price target on shares of Michael Kors heading into the third-quarter print.

The company, based on historical data from Benzinga, normally reports earnings around 6:55 a.m. EST.

Get The Details Of The Report First On Benzinga Pro

Try the new Benzinga Pro Beta version to get the quickest analysis of the Michael Kors’ report just seconds after the company issues results!

Image Credit: Public Domain

Latest Ratings for KORS

Date Firm Action From To
Jan 2016 Buckingham Research Assumes Neutral
Jan 2016 Piper Jaffray Upgrades Underweight Neutral
Oct 2015 Cowen & Company Downgrades Outperform Market Perform

View More Analyst Ratings for KORS
View the Latest Analyst Ratings

Posted-In: Analyst Color Earnings News Previews Reiteration Retail Sales Analyst Ratings Trading Ideas Best of Benzinga


Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!





You must be logged in to make a comment.
You can sign up for a membership or get a FREE Daily News membership or log in

Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!