The Handbag Pair Trade Revisited: Jefferies Picks Kors Over Coach

Amazon.com, Inc. AMZN may end up taking over the world, but there’s one thing it won’t replace — brands.

After attending the Michael Kors Holdings Ltd KORS KORS Collection show during New York Fashion Week, Jefferies analyst Randal J. Konik was affirmed in his notion that Michael Kors is a fashion icon.

“Michael Kors is a brand and brands have scarcity value in today’s world,” said Konik.

Things are starting to get better for the once struggling brand; handbag sales are starting to get better and average selling prices trending up during two of the last three months in the retail.

“Management is making solid choices to improve long-term brand health” said Konik.

While the analyst acknowledged Wall Street's disdain for the company, "calling the stock a value trap is insulting," he contends.

Jefferies maintains a Buy rating on Michael Kors, with a $60 price target

Amid improvements from Coach Inc COH management after the purchase of Kate Spade and a key global ambassador partnership with Selena Gomez, Konik continues to prefer Michael Kors as he monitors the brand's turnaround, asserting that shares are currently too expensive at the moment.

Jefferies maintains a Hold rating on Coach with a $42 price target.

At last check, shares of Coach were down 1.19 percent at $41.60, while shares of Michael Kors were up 3.4 percent at $44.38.

Related Link: 13% Downside Seen For Michael Kors As Market Saturation Persists