UPDATE: Nomura Initiates Coverage on Fossil Group on Current Valuation

In a report published Monday, Nomura analyst Simeon Siegel initiated coverage on

with a Neutral rating and $114.00 price target. In the report, Nomura noted, “We believe success in 1) geographic (Asia), 2) segment (Direct-to-Consumer), and 3) product (new licenses/jewelry) growth is reflected in current valuation. Although we believe FOSL is one of the more compelling long-term global growth stories in our group with high barriers to entry and limited competition, we are on the sidelines until we see greater evidence that new growth will not come at the expense of current brands. We estimate FY13/FY14 EPS of $6.21/$7.14 compared to the Street at $6.29/$7.17. Our target price of $114 is based on 16x our FY14 EPS, vs. coverage universe average 18x and the company's 10-year average of 15.9x.” Fossil Group closed on Friday at $112.25.