Below is a chart and brief excerpt from today's Early Look written by Retail analyst Brian McGough.
The evolution of the portfolio is what gets you paid today buying CPRI. Even after the run in the stock since our call in November, our math suggests that you are paying today for the Kors brand, and are getting Versace and Jimmy Choo for free. As the margin profile across all three brands explodes over the next two years, and as the portfolio mix skews further towards higher-growth/multiple Versace and Jimmy Choo, you get paid through both outsized earnings growth and multiple expansion. Our SOP suggests $86 in 3-years (see math below).