Nomura Securities Starts Michael Kors (KORS) at Buy; Runway to Greatness

Nomura Securities initiates coverage on Michael Kors (NYSE: KORS) with a Buy. PT $34.00.

Analyst, Paul Lejuez, said, "We believe that the Michael Kors growth story is among the best in retail. While square-footage growth is hard to come by in retail, KORS is a proven brand that is in the early stages of expansion. In the United States alone, we expect the company to grow square footage at a 20% CAGR over the next five years. We expect EBIT margins to expand 450bps during this period, driving EPS growth of 25%-plus annually. Our DCF supports our $34 target price and represents 18.9x our FY13E (ending March 2013) EBITDA and 42.1x our FY13E EPS of $0.81 (and we believe our estimates could prove conservative), in line with Lululemon's (Nasdaq: LULU) current multiples."

For an analyst ratings summary and ratings history on Michael Kors click here. For more ratings news on Michael Kors click here.

Shares of Michael Kors closed at $29.76 yesterday.

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