Wedbush Reiterates Neutral Rating, $54 PT on Coach on Lowered 3Q EPS

In a report published Monday, Wedbush analyst Corinna Freedman reiterated a Neutral rating and $54.00 price target on Coach

. In the report, Freedman noted, “We are lowering our Direct comp for COH from -4% to -5%, which negatively impacts our EPS estimate by ~$0.01. We believe the shift in pricing strategy at the outlet stores from 20-40% off coupons to hard discounting at 50% off, while coincident with other incrementally aggressive promos observed in the outlet channel by other brands, is likely a response to weak outlet mall traffic, which we attribute to inclement weather, payroll tax increases and perhaps delayed tax refunds which likely impacts the outlet shopper disproportionately. We continue to believe that COH is over-indexed to the outlets and Direct comps are likely more sensitive to outlet traffic trends.” Coach closed on Friday at $50.41.