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Michael Kors: "The Sexier Story"

  • Wells Fargo analyst: "The Kors story is finally changing"
  • The stock is up 28 percent in three months
  • Analyst likes long-term and near-term picture

For the second time in a week retailer Michael Kors is getting some positive attention from a Wall Street analyst.

A Michael Kors retail store on Market Street in San Francisco.
Adam Jeffery | CNBC
A Michael Kors retail store on Market Street in San Francisco.

Wells Fargo's Ike Boruchow hiked his price target from $47 a share to $49, although he did maintain his "market perform" rating. Despite keeping an "outperform" on rival Coach, he believes Kors is definitely the "sexier story" in retail.

"While the fundamental story is far from perfect today, management has changed the longer-term narrative on the stock, while the near-term setup is also fairly compelling" according to the note released Tuesday morning. Boruchow cites the company's rising sales numbers, its upbeat recent guidance, and its acquisition of luxury shoemaker Jimmy Choo as positive catalysts.

A shopper looks at Michael Kors handbags at Macy's flagship store in New York.
Scott Mlyn | CNBC
A shopper looks at Michael Kors handbags at Macy's flagship store in New York.

The broader question, however, for investors looking to invest in retail is whether the sector has bottomed. "I believe in some bottom fishing" said Aureus Asset Management Chairman and CEO Kari Firestone. But she warned "you need to get it right because they won't all succeed in moving the fundamental needed and the web will continue to put price pressure on them."

Shares of Michael Kors are down 35 percent from their high three years ago. But the stock has had a strong three month performance, up 28 percent. In comparison the S&P Retail sector is flat in the same time period.

Just last week Oppenheimer hiked its price target on KORS to $55 a share rating the stock "outperform."

Firestone likes Michael Kors' recent run but still isn't convinced enough to buy the stock given her overall concern about the sector at-large. "The retailers represent a beaten down group about which everyone has lost confidence," she said.