Citi analyst Kate McShane notes that Kate Spade shares have already rallied "considerably" since reports emerged in late December that the company could be shopping itself, though she expects the stock to trade higher now that the company has confirmed it is running a process to explore strategic alternatives. Additionally, Q4 results were better than expected, though brick-and-mortar comp declines are concerning, McShane tells investors. She has a Buy rating and $18 price target on Kate Spade shares, which are up nearly 10% to $21.61 in morning trading.