Michael Kors : Fundamentals should come back to the foreground
By Alexis Peyrard
Entry price | Target | Stop-loss | Potential |
---|---|---|---|
US$88.65 | US$0 | US$86.4 | -100% |
The fundamentals of the company are strong. Sales grew of 52% last year and perspectives on the activities are encouraging. In facts, revenues should exceed USD 4 billion this year. Moreover, the profitability should stay close to 20% over the same period. Analysts are optimistic and regularly upgrade their estimates for both revenue and EPS. Finally, the consensus is largely buyer with a potential of 23% considering the average target price.
Technically, the stock is coming back to interesting levels. Indeed, the USD 88 area represents a support level but also an ascending trend line that supports prices for several months. The majority of weekly moving averages are well-oriented and militates for a rebound towards USD 94 and by extension a return to USD 100.
Therefore, a long position could be taken at the current prices with a target at USD 94. Nevertheless, a stop loss will be placed under the support level in case of further consolidation.