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UPDATE: Michael Kors Shares Fall as Citi Highlights Cautious Discounting Reads from Channel Checks

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Shares of Michael Kors (NYSE: KORS) pushed below the all-important $50 level early Thursday afternoon following a mid-day research note from Citi's Oliver Chen. The stock is down more than three percent at last check.

The Citi analyst reduced estimates and his price target on Michael Kors shares from $68 to $60 while maintaining a Buy. Chen cited "lower 2H gross margin & comp assumptions given incrementally cautious reads from our channel checks" and slightly increased clearance.

Citi now expects Michael Kors to report Q3 EPS of $0.43, down modestly from $0.45 previously. The firm's FY12 and FY13 EPS estimates were lowered from $2.35 and $1.73 to $2.25 and $1.66, respectively.

Despite the concern, Chen "believe sales trends continue to be robustly better than others & brand/product innovation remains topnotch..." He is also attracted to Michael Kors' "premium positioning at value prices, leading store and wholesale growth, a structured path to grow comps store sales, and opportunities in Europe."

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