Nomura Securities Starts Kate Spade (KATE) at Buy

Nomura Securities initiates coverage on Kate Spade (NYSE: KATE) with a Buy rating and a price target of $41.00.

Analyst Simeon A. Siegel comments, "We are initiating coverage of Kate Spade & Co. (KATE) with a Buy rating, as we expect the company to continue posting best-in-class top-line growth through ongoing share gains (further brand awareness, coupled with new concepts and product categories) at the same time global luxury spending continues to grow. We expect this growth to be driven by: 1) double-digit comps, 2) ongoing North American retail expansion (37% FY14E), 3) wholesale growth (15% FY14E), 4) international expansion, 5) further ecommerce traction, and 6) new license categories. Our DCF-driven $41 TP is based on a ~$6.8bn terminal value, which represents 26x our FY17E EPS."

The firm set FY14/FY15/FY16 EPS estimates of $0.28/$0.65/$1.13 are above the Street at $0.26/$0.64/$1.04.

For an analyst ratings summary and ratings history on Kate Spade click here. For more ratings news on Kate Spade click here.

Shares of Kate Spade closed at $35.10 yesterday.

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