NEW YORK (TheStreet) -- In the last year, Michael Kors (KORS) shareholders have seen nothing but disappointments and lower share prices. The stock is down 35%, but I think the shares can mount a turnaround. I expect KORS to report a solid fourth quarter on Wednesday morning. If I'm right, the stock could return to $80 by the end of this year.
Analysts are expecting the company to report $1.09 billion in revenue and $0.91 per share. Several handbag surveys that I've seen indicate those estimates are low. In handbags, an important category, KORS seems to be taking market share from Coach (COH). If you recall, Coach fell 6.3% in late April after disappointing revenue results (down 15%) and poor same-store sales.
Merrill Lynch and Goldman Sachs each regularly poll a large selection of women between the ages of 18 and 65 who plan on buying a handbag within the next 12 months. According to both surveys, women are more interested in buying new handbags from Michael Kors than Coach. Coach has steadily lost popularity, especially after the holidays. It's an important result, since 25% of America women own a Coach bag and about 18% own a Kors bag.
Coach has been pulling back from discounting -- both in stores and online. Women seem to have noticed the strategy and are shifting their preferences toward KORS. According to Merrill Lynch, 92% of women who spend less than $250 on a handbag indicate they prefer Kors bags now.