Update (9:37 a.m.): Updated with Thursday market open information.
NEW YORK (TheStreet) -- Barclays trimmed its estimates on Kate Spade (KATE), set a $50 price target and holds an "overweight" rating. The firm cited strong growth with a heave promotional environment.
Nomura, on the other hand, increased its price target to $43, increased its estimates and set a "buy" rating. The firm noted the company is gaining market share.
The stock was down 1.38% to $37.08 at 9:35 a.m on Thursday.
Separately, TheStreet Ratings team rates KATE SPADE & CO as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate KATE SPADE & CO (KATE) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, expanding profit margins and impressive record of earnings per share growth. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Textiles, Apparel & Luxury Goods industry. The net income increased by 224.7% when compared to the same quarter one year prior, rising from $57.03 million to $185.17 million.
- The gross profit margin for KATE SPADE & CO is rather high; currently it is at 56.83%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 43.37% significantly outperformed against the industry average.
- KATE, with its decline in revenue, underperformed when compared the industry average of 15.4%. Since the same quarter one year prior, revenues fell by 12.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- Powered by its strong earnings growth of 158.00% and other important driving factors, this stock has surged by 56.09% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
- Net operating cash flow has declined marginally to $98.14 million or 0.50% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- You can view the full analysis from the report here: KATE Ratings Report