– Owner of Versace, Michael Kors, and Jimmy Choo brands.
– Trades as a subpar retailer at 6x NTM PE.
– Belongs in the luxury retailer category with LVMH and should garner a much higher multiple.
– Luxury accounts for 35% of sales with the remaining 65% being ‘affordable luxury’.
– Excellent execution by management with a demonstrated ability to navigate through challenging times. – Stock is expected to quadruple in two years.
– Exp. $11/share earnings in 2 years.
– Luxury peers Hermes and LVMH trade at 40x and 25x.
– ‘Affordable luxury’ peers sit at 15x.
– At blended 25x >> $200/sh.
Exp. gain: +300% to $200/sh.
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