Morgan Stanley adds Michael Kors to top picks

NEW YORK (AP) -- A Morgan Stanley analyst on Monday added Michael Kors Holdings Ltd. to the investment bank's "Best Ideas" list, saying that the high-fashion clothing and accessories company's long-term earnings potential is one of the retail industry's best and not fairly reflected in its stock price.

THE OPINION: Kimberly Greenberger said she expects the Hong Kong-based company's next quarterly results, set to be released later this month, to beat expectations and send its shares higher.

She added that Michael Kors should be able to meet fiscal 2014 earnings predictions and could exceed them by as much as 51 percent under ideal conditions.

Greenberger said that while some investors may be concerned about weak shopper traffic, Kors should be able to outperform its competitors and beat earnings predictions. She pointed to information gleaned from store visits, the company's upbeat March management meeting, indications of higher watch and handbag demand, and beatable expectations for selling, general and administrative expenses.

"Michael Kors is retail's best growth story, with a global sales opportunity across multiple categories and channels, plus an experienced management team, in our view," Greenberger wrote in a note to investors.

THE SHARES: Up 90 cents to $61.26 in afternoon trading, after peaking at $62.25 earlier in the day. The shares edged closer to their all-time peak of $65.10 set earlier this year. The company went public in December 2011.