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Coach At 52-Week Highs Following Analyst Upgrade

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Coach At 52-Week Highs Following Analyst Upgrade

Coach Inc (NYSE: COH)’s amazing turnaround this year continues; Buckingham Research Group analyst Scott Krasik upgraded the stock from Neutral to Buy with a price target raised 24 percent from $45 to $58.

Coach shares spiked 2.1 percent to $47.70 quickly after Monday’s open before pulling back slightly to around $47.30.

The stock is up nearly 35 percent this year and is back to levels last seen in April 2014.

Buckingham’s Bull Case

Krasik said Coach has significantly outperformed the SPDR S&P Retail (ETF) (NYSE: XRT) this year, which is down 9.6 percent, and expects the trend to continue through the year.

The analyst believes core margins can expand by more than 22 percent by fiscal 2020 from the current 19 percent, and the company will benefit from additional acquisitions in the long term (see Krasik's track record here).

In the near term, Coach’s acquisition of Kate Spade & Co (NYSE: KATE) can exceed management’s initial guidance and investor expectations.

Krasnik also expects that, over the next 12–24 months, the handbag sector will become less promotional as the big players reduce inventory.

Investors should look forward to Coach’s fourth quarter results driving positive sentiment and upward multiple revaluation.

Related Links:

Cramer: Coach Is Now Out Of The 'Doghouse'

Benzinga's Top Upgrades, Downgrades For June 26, 2017
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Image Credit: By Preston Smalley (http://www.flickr.com/photos/prestons/4113771768/) [CC BY-SA 2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons

Latest Ratings for COH

DateFirmActionFromTo
Nov 2017Initiates Coverage OnPositive
Oct 2017MaintainsOutperform
Oct 2017MaintainsBuy

View More Analyst Ratings for COH
View the Latest Analyst Ratings

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