Comparing Kate Spade’s stock market performance to peers
Kate Spade (KATE) delivered an above-average stock market performance and gained about 21% by the end of July 2016. In comparison, the S&P 500 Apparel and Accessories index had gained 6.5% by July 31, 2016.
However, as the company reported its 2Q earnings, its stock tumbled 18%, putting its YTD (year-to-date) losses at 8.1% on August 3, 2016. The company’s stock price improved thereafter, and its YTD losses stood at 2.1% on August 5, 2016.
Kate Spade’s closest competitors Michael Kors (KORS) and Coach (COH) have performed far better than Kate Spade. Both the companies have gained ~25% YTD. Kate Spade has however done better than Ralph Lauren (RL), which has lost 14% of its value to date.
Wall Street’s view on Kate Spade
Wall Street is positive on Kate Spade and sees a potential for a stock price increase. Kate Spade’s stock, which traded at $17.55 on August 5, has been assigned a mean price target of $21.43 by 18 analysts. This indicates a good 22% average upside potential over the next 12 months.
The most recent recommendation of “outperform” on Kate Spade came from Cowen on August 5, 2016. Cowen assigned Kate Spade a target price of $18, ~2.6% higher than the stock’s August 5 closing price.
Buckingham Research Group assigned Kate Spade a target price of $29, indicating a 65% upside potential. BMO Capital Markets, on the other hand, has assigned a target price of $17 for Kate Spade. This indicates a downside of 3.1% to the company’s price on August 5.
ETF investors seeking to add exposure to Kate Spade can consider the iShares S&P Mid-Cap 400 Value ETF (IJJ), which invests 0.18% of its portfolio in the company.