Mizuho Upgrades Michael Kors, Suggests Company Had A Strong Holiday Season

Betty Chen of Mizuho Securities on Friday upgraded Michael Kors Holdings Ltd (NYSE: KORS) to Buy from Neutral with an $82 price target following an internal survey indicating the company had a strong holiday season.

According to Chen's survey of more than 400 U.S. consumers, over 43 percent stated they had purchased a Michael Kors item during the

holiday period. The survey also reveals that 35 percent of respondents plan to choose Michael Kors as a destination for the bulk of their 2015 purchases, as the company remains a “top of mind” brand, which suggests expectations for an immediate comp and margin drop are overdone at current valuation.

The survey suggests that a “high percentage” of women either purchased, gifted or received a Michael Kors item within the past three months, indicating a continued brand resonance.

The analyst notes that the relatively flattish sequential change in discount levels bodes well for the company as investors had expected deeper discounts during the holiday season to boost sales. Chen states that “we believe the company's ability to maintain a relatively benign promotional stance may be attributable to its favorable standing across a variety of barometers.”