UPDATE: Sterne Agee Initiates Coach at Buy on Dividend and FCF Yield Support

Sterne Agee initiated coverage on Coach COH with a Buy rating and a $58.00 price target. Sterne Agee commented, "While the company's domestic business has admittedly struggled of late due to challenges from younger competitors (such as KORS, Tory Burch and kate spade), the company still has a very appealing global expansion strategy. Even with modest market share and margin declines in the U.S., we believe COH can continue to grow top line and maintain consolidated operating margins driven by growth in Asia-Pac. … While we wouldn't expect a real inflection in the business for another 6 months (Q3 likely soft as transition to “lifestyle” brand will take some time), a 2.5% dividend yield and an 8% FCF yield should help put a bottom in the stock until fundamentals improve." Coach closed at $48.22 on Friday.