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KORS versus COH: Comparing Wall Street Valuations

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Kors in the stock market

Unimpressive financial performance has taken a toll on Michael Kors’ (KORS) stock market performance. Its shares have tumbled more than 15% to date.

In comparison, competitor Coach (COH) is sitting on YTD (year-to-date) gains of 35%, which is also among the best performances this year in apparel stocks. VF Corp (VFC) and PVH Corp (PVH) are also up 17% and 32%, respectively.

Michael Kors has also underperformed the S&P 500 Apparel and Accessories index, up 6.5%, as well as the S&P 500 Index (SPX), up 10.3%.

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Wall Street on KORS and COH

KORS is covered by 22 Wall Street analysts. Together, they rate the stock a 3 on a scale of 1 (strong buy) to 5 (strong sell).

The majority of analysts, ~77%, suggest holding Michael Kors’s stock. Deutsche Bank, Morgan Stanley, and Evercore ISI Group are among the brokers with a “hold” rating. Of the remainder, 14% of analysts recommend buying the stock while 9% suggest selling it.

In comparison, Coach’s stock is rated as a 2 with 71% buy, 26% hold, and 3% sell recommendations.

Comparing target price and gain potential

Kors is currently trading at $36.44, ~46% below its 52-week high price. Analysts expect the company’s stock price to touch $37.40 over the next 12 months, which indicates an upside of ~3%.

Despite recording superb gains this year, Coach has a better upside. The company’s share price is predicted to jump another 8% over the next year.

ETF investors seeking to add exposure to KORS and COH can consider the First Trust Consumer Discretionary AlphaDEX Fund (FXD), which invests ~2% of its portfolio in the two companies.

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