FILE- In this May 31, 2017, file photo the Michael Kors name adorns his store on Madison Avenue, in New York.Did Michael Kors Holdings overpay for Versace? The market said yes, but some analysts see something different. (AP Photo/Richard Drew, File)
INTERNATIONAL - Did Michael Kors Holdings overpay for Versace? The market said yes, but some analysts see something different.

The stock got two upgrades in the past two days, with analysts at UBS Group AG and Piper Jaffray both citing the potential for Versace to drive gains after the stock was punished for the $2.2 billion acquisition in late September. 

Michael Kors lost as much as $1.8 billion in market cap after it announced the deal, and is now down almost 13 percent since then, compared with a drop of more than 8 percent in the S&P 500 Consumer Discretionary Index over that same span.

The “Michael Kors, Jimmy Choo, and Versace brands are much stronger than the market appreciates,” Jay Sole, an analyst at UBS, wrote in a note Friday. He raised the stock to buy from neutral and assigned an $80 price target, about 36 percent above current levels, saying that a successful integration of Versace may prompt investors to give a higher valuation more typical of its luxury-good peers.

Michael Kors trades at 11.4 times estimated earnings, compared with 19.2 for Ralph Lauren Corp. and 14.7 for Tapestry Inc., according to data compiled by Bloomberg.

This undated photo provided by Michael Kors shows from left, CEO of Versace Jonathan Akeroyd, Donatella Versace, and chairman and CEO of Michael Kors John D. Idol. Michael Kors is buying the Italian fashion house Versace in a deal worth more than $2 billion, continuing its hard charge into the world of high-end fashion. (Rahi Rezvani/Michael Kors Holdings Ltd. via AP)
Erinn E. Murphy, an analyst at Piper Jaffray, says that while Versace generates only 18 percent of its sales in the Americas today, its large Instagram following -- 14.7 million -- suggests there’s room for it to grow in the U.S. She writes Versace currently has a revenue base of $58 per follower, compared with Michael Kors’s $357 per follower.

Murphy upgraded the stock to the equivalent of buy from hold with a $71 price target, saying the company is “under-appreciated and undervalued.”

Michael Kors reports earnings on Nov. 7 before the market opens.