Mizuho Securities Remains Sidelined on Michael Kors (KORS) Following 4Q EPS Beat
Mizuho Securities reiterated a Neutral rating and $50.00 price target on Michael Kors (NYSE: KORS) following the company's 4Q earnings report. KORS reported an EPS of $0.98, beating the Street’s $0.97 estimate. Mizuho decided to adjust its 1Q EPS estimates to $0.72 from $0.94 reflecting global comps of (5)%, consistent with the company's EPS guide of $0.70-0.74.
Analyst Betty Chen commented, "We are adjusting our estimates to reflect a lower tax rate, planned share repurchases, and Int’l growth offsetting NA struggles. While we are encouraged by indications of healthy +DD unit growth for NA handbags and KORS’ plans to pull back on wholesale inventory to control LT brand/margins, management assumptions for 2H acceleration on product introductions and CRM analytics may prove optimistic. Despite delaying the return of 23-24% EBIT margins another year on planned investments, shares may see NT support on prospects of Greater China/Int’l contribution and discounted valuation."
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Shares of Michael Kors closed at $42.72 yesterday.