UPDATE: Citigroup Initiates Buy, $85 on Coach

Citigroup initiates its coverage on Coach (NYSE: COH) with a Buy rating and a price target of $85 on a ~20 percent earnings potential over the next several years.

Citigroup says, "There's traction on the men's business and growth in China looks underappreciated, with an inflection in FY13 that should carry a stronger benefit to earnings than consensus anticipates. The near term picture looks compelling, too, with an accelerating comp trend in 2Q and the potential for gross margin upside in 2H as the company cycles higher input costs and shifts production out of China."

COH closed at $74.01 a share on Thursday.