UPDATE: Bank of America Downgrades Coach to Neutral, Lowers PT as Glimmers of Hope Can't Offset Weak Traffic

In a report published Wednesday, Bank of America analyst Lorraine Hutchinson downgraded the rating on

from Buy to Neutral, and lowered the price target from $63.00 to $54.00. In the report, Bank of America noted, “We are downgrading Coach to Neutral as we now think the turnaround will take more time than we expected. While strong results in international, men's and footwear are a positive and a good initial reaction to the new capsule collection is encouraging, all of these are too small to offset the weakness in the women's handbag business. Coach reported F1Q14 EPS of $0.77, below our $0.79 estimate driven by lower than expected NA comps (-6.8%). Coach lowered its F2014 sales and OM guidance given ongoing traffic challenges. We are lowering our F2014 and F2015 EPS estimates to $3.49 and $3.86 from $3.85 and $4.42 to reflect our lower sales and margin forecast and our Price Objective to $54 (15x our calendarized F2014 estimate) to reflect our new estimates. We expect shares to remain range bound as it takes longer than expected for Coach to execute on its product turnaround given macro pressures and intense competition.” Coach closed on Tuesday at $50.10.