Piper Jaffray Raises Price Target on Michael Kors (KORS) Following Improved 3Q

Piper Jaffray reiterated a Neutral rating on Michael Kors (NYSE: KORS), and raised the price target to $54.00 (from $38.00), following the company's 3Q earnings report. Michael Kors reported retail sales came in up 11.1% Y/Y for the quarter (or +15.7% CC), an acceleration from up 7.5% sales growth in Q2. Overall wholesale sales were driven by strong international performance and footwear category strength.

Analyst Erinn Murphy commented, "We are raising our estimates on KORS following a much-improved Q3 report in which metrics were solid across the board and management sounded encouraged by recent sales trends QTD. While our Neutral rating is predicated on a 12-month view, our nearterm bias is positive, particularly with the company's February 9th Fall 2016 Collection Preview ahead of us. We are raising our FY16 EPS from $4.12 to $4.42 and our FY17 EPS from $3.50 to $4.48. Clearly, this is a wide deviation from where we were previously but we believe the improved top-line with flattish gross margins going forward and the likelihood of continued buybacks all support a better EPS outlook. Our PT moves up from $38 to $54 on 12x (up from 11x) our new FY17 estimate."

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 $40.44 yesterday.

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