Option Trade 
Michael Kors Holdings Ltd (NYSE:KORS) Calls 
Tuesday, 9th August, 2016

** OPTION TRADE: Buy the KORS NOV 18 2016 55.000 call at approximately $2.55. Place a pre-determined sell at $5.00.

Note: No protective stop losses added -- but if you wish to do so make it $1.00.

by Ian Harvey

August 09, 2016

Michael Kors Holdings Limited (NYSE:KORS), a global accessories, footwear and apparel company, is set to post its Q117 quarterly earnings results tomorrow, August 10th. Analysts expect Michael Kors Holdings to post earnings of $0.74 per share and revenue of $954.13 million for the quarter. Michael Kors Holdings has set its Q1 guidance at $0.70-0.74 EPS and its FY17 guidance at $4.56-4.64 EPS.

During the same period last year the company reported earnings of $0.87 per share, and KORS stock is up 25.2% on the year.

KORS has been stuck in a sideways pattern, but that should change following the company’s fiscal first-quarter report. The consensus calls for earnings of $0.74 per share, but the street has a slightly higher whisper number of $0.77, which is what Wall Street is really hoping to see in the company’s upcoming report.

KORS has a four-quarter streak of dividend increases, and last quarter it enjoyed better than expected revenue as well. Last quarter’s report led to a nice jump in the stock, and investors could enjoy another rally if Q1 earnings impress.

The stock has a pretty low P/E of 11.2, and Wall Street has a bullish price target on the stock, which suggests a decent amount of upside potential post-earnings.

The company’s 50-day moving average is $50.47 and its 200 day moving average is $50.66. The stock has a market capitalization of $8.85 billion and a PE ratio of 11.32. Michael Kors Holdings Ltd. has a 1-year low of $34.83 and a 1-year high of $59.49.

Why Michael Kors?

Piper Jaffray believes that the handbag and accessories market is going to post very strong results and hence recommends investors to purchase the stock as they are almost certain to gain following the earnings print.

Michael Kors Holdings shares a similar kind of tone with its industry rival Coach and is expected to outperform the estimates. The company is scheduled to announce quarterly earnings for the first quarter of the fiscal year 2017 on August 10. The consensus revenue estimate is $954.13 million with an EPS of $0.74.

Piper Jaffray analyst sees a horde of catalysts arriving in the short term for the above mentioned stock and believes it will rise strongly following the earnings prints.

Analyst Input

Michael Kors Holdings Ltd.‘s stock had its “buy” rating reaffirmed by Jefferies Group in a research report issued to clients and investors last Wednesday.

Also, several other equities research analysts have recently commented on the company.

• Piper Jaffray Cos. upgraded shares of Michael Kors Holdings from a “neutral” rating to an “overweight” rating and set a $67.00 price objective for the company in a research note on Wednesday, April 27th.

• Credit Suisse Group AG restated a “neutral” rating on shares of Michael Kors Holdings in a research note on Thursday, July 28th.

• Mizuho lifted their price objective on shares of Michael Kors Holdings from $45.00 to $50.00 and gave the company a “neutral” rating in a research note on Friday, April 22nd.

• Finally, Deutsche Bank AG restated a “buy” rating on shares of Michael Kors Holdings in a research note on Tuesday, April 12th.

One investment analyst has rated the stock with a sell rating, eighteen have assigned a hold rating, nine have assigned a buy rating and one has assigned a strong buy rating to the company. The company currently has a consensus rating of “Hold” and an average target price of $55.29 on the stock. The bullish price target indicates potential 10.6% upside potential.

Harvey’s Options Volatility Indicator

Conclusion

Therefore, based on the facts above, and Harvey’s Options Volatility Indicator, the following option trade is recommended…..

** OPTION TRADE: Buy the KORS NOV 18 2016 55.000 call at approximately $2.55. Place a pre-determined sell at $5.00.

Note: No protective stop losses added -- but if you wish to do so make it $1.00.

”Success is simple. Do what's right, the right way, at the right time.”

Option Tip for your Success!
Options traders are not successful because they win.
Options traders win because they are successful.



Back to Stock Options Made Easy Home Page

Back to Option Trades from Option Trade – Michael Kors Holdings Ltd (NYSE:KORS) Calls - Tuesday, 9th August, 2016



Get all the latest options news from
STOCK OPTIONS MADE EASY with our FREE newsletter


Enter Your Email Address

Enter Your First Name








Search Stock Options
Made Easy



Enjoy Relaxed or Fast-Paced Trading? Choose your Membership Style...

Whether you prefer to take a laid-back approach to your trading,

or to charge ahead in your options trading,

 Stock Options Made Easy Armchair Trader and Cut-to-the-Chase Trader Memberships put everything you need to succeed at your fingertips for just  $39 or $79 per month.







Subscribe to our FREE
newsletter for all the latest options news!


Enter Your Email Address

Enter Your First Name