Michael Kors Holdings Ltd (KORS), Urban Outfitters, Inc. (URBN) and J C Penney Company Inc (JCP): How Morgan Stanley’s Retail Picks Performed since Last Year

Morgan Stanley’s managing director, Kimberly Greenberger, discussed the firm’s view on the top retail names like Michael Kors Holdings Ltd (NYSE:KORS), Urban Outfitters, Inc. (NASDAQ:URBN) and J C Penney Company Inc (NYSE:JCP) on CNBC, exactly a year ago. We decided to go through the performances of these stocks an year after Greenberger gave her views on-air, to check how accurate Morgan Stanley’s views were.

Morgan Stanley

The firm was correct with its ‘Overweight’ rating on Michael Kors Holdings Ltd (NYSE:KORS) with a price target of $74. Michael Kors Holdings Ltd (NYSE:KORS)’s shares reached the target in October 2013 and have continued to trade above that figure since then. However, Morgan Stanley had an ‘Underweight’ rating on J C Penney Company Inc (NYSE:JCP), with a target of $9, the stock used to trade at about $12.85 at that time. The stock reached its target of $9, pretty soon after the views were aired and continues to trade near that, even now.

“We have been ‘underweight’ on this stock for well over a year and our number one concern here is that this is a company that’s burning through cash at a very alarming pace. They finished the second quarter here with a billion five in cash, which means, they spent or used about $1.3 billion of cash within the quarter. That gives them a billion five, they have got a little bit of liquidity in their asset backed line of credit still remaining, but our cash flow forecast continues to suggest that J C Penney Company Inc (NYSE:JCP) runs out of cash in the next 4 to 5 quarters [...],” Greenberger said.

Greenberger was also bullish on Urban Outfitters, Inc. (NASDAQ:URBN), Morgan Stanley set an ’Overweight’ rating on the stock with a price target of $47. Sadly, Urban Outfitters, Inc. (NASDAQ:URBN)’s stock that was trading at nearly $41 sunk below $40 shortly after, and continues to trade below this level. Even though Greenberger was cautious on retail sales at the time, she was quite optimistic that Urban Outfitters, Inc. (NASDAQ:URBN) will stand out among other retailers in terms of performance. Urban Outfitters, Inc. (NASDAQ:URBN) had performed in line with Greenberger’s forecasts for a few months, but since then has not been performing well as was evident from its first quarter results in May 2014, when it declared an EPS of $0.26 versus $0.27, that most analysts on the Street were expecting.

Disclosure: None

Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

On the Move: The 10 Fastest Growing Businesses in 2015

Fast Money: The 10 Highest Paying Fast Food Restaurants

Mixing It Up: The 14 Best Music Mashups of 2014

Rito Pls Buff: The 10 Least Played Champions in LoL Season 4

10 Covers of Popular Songs that are Better than the Originals

Must See TV: The 9 Most Anticipated Shows of 2015

The 15 Biggest Box Office Bombs of All Time

10 Things The World Can’t Stand About Americans

Picture Perfect: The 6 Smartphones with the Best Cameras

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!