Boston, MA 07/16/2014 (wallstreetpr) – Shares of Michael Kors Holdings Ltd (NYSE:KORS), an accessories and footwear maker, fell nearly 7.3 percent on Tuesday as analysts weighed in on the stock with bearish notes. The cautious commentaries saw the analysts question the heavy discounts on company’s products as well as its declining Web popularity as measured by Google Inc (NASDAQ:GOOG) searches.
Brands lack newness
Citigroup Inc (NYSE:C)’s analyst Oliver Chen chopped his price target on the stock of Michael Kors Holdings Ltd (NYSE:KORS) to $98 per share from $107. The analysts observed that a survey of some 62 stores revealed that some retailers felt that the products of Michael Kors lacked newness.
The analyst also reported that in a survey, 17 percent of the respondents said the company’s products did not meet sales targets. That compared with only one percent of the respondents who held the same view in the January-March period.
In his report, Chen also observed that more stores were placing hefty discounts in the range of 30-50 percent on the products of Michael Kors Holdings Ltd (NYSE:KORS). The analyst expects the stock to be range-bound, at least, in the near-term. Chen rates the stock Neutral.
Sales and Web popularity correlate
Michael Kors Holdings Ltd (NYSE:KORS) earned another cautious note from Barclays’ Joan Payson. He reported in his noted that in at least five weeks beginning June 7, Google searches on Michael Kors dropped in number compared to the levels noted a year ago.
The analysts went on to stated that for the past three years, there has been a high correlation between Michael Kors Holdings Ltd (NYSE:KORS)’s North American retail sales and Google searches. Payson rated the stock Underweight and kept the price target at $82.
Maxim’s Rick Snyder was another source of bad news as he chopped the price target on the stock from $109 to $85. He also downgraded the stock to Hold from Buy. He noted weakening domestic sales in the company.
Michael Kors Holdings Ltd (NYSE:KORS) competes for the market share with Coach Inc (NYSE:COH) and Kate Spade & Co (NYSE:KATE).
