Cowen Met With Coach's CEO; Here's What Happened

In a report published Monday, Cowen and Company analysts maintained a Market Perform rating on Coach Inc COH, while raising the price target from $41 to $43, following a meeting with the company's CEO Victor Luis, CFO Jane Nielsen and others from the management team.

The analysts commented, "We came away from the meeting confident that mgmt is making the right decisions needed to reinvigorate growth. We view COH in fine-tuning mode given tangible better performance with Swagger, renovated store progress, new more relevant/targeted marketing, and gifting product mix upside potential."

The analysts pointed out that their Cowen Consumer Tracker Survey supports the company's comments that "transformation initiatives are driving positive customer responses."

In the report Cowen and Company noted the "key milestones to watch for" as:

• eOS pressure easing by the second half of next year
• Continued outperformance of Modern Luxury format
• Positive North America comps by 4Q16

"We view COH as in a transitional phase as the company executes its positioning as a Modern Luxury star. We are most concerned about Coach’s need to restore traffic, abate promotional pressures at Outlet, and the timing of returning comps to growth…We expect stock to likely trend range-bound in the near term, with upside potential upon signs of improving comp store sales," the analysts added.