Coach (COH) Valuation Range Lifted at Wells Fargo Post Q4
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Wells Fargo analyst Ike Boruchow reiterated an Outperform rating and bumped his valuation range on Coach (NYSE: COH) to $46-$48 (from $45-$47) as Q4 beasts on return to positive comps.
Boruchow commented, "· Taking a step back, COH has delivered on their turnaround strategy that was laid out over 24 months ago – posting their first positive comp in 3+ years. Comps continued to improve (+2% in Q4), while the company’s “self-help” story appears to somewhat insulate them from several macro headwinds facing accessory peers (pricing pressure, outlet traffic declines, etc.). While buyside expectations crept up heading into the print, there were no holes in today’s release, and management’s outlook remains upbeat (150+ remodels coming, meaningful margin expansion opportunities, planning for positive comps every quarter) while proactive wholesale initiatives should be longer-term benefits to the brand (shrinking unproductive doors). While we appear to have finally seen the inflection take place, we still see a story with legs here, and momentum building into next FY. Tweaking FY17/18 EPS estimates to $2.14/$2.42 (previously $2.18/NA) and valuation range to $46-$48 (from $45-$47) on 20x our CY17 EPS estimate."
Shares of Coach closed at $41.45 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst EPS View, Analyst PT Change
Related EntitiesWells Fargo, Ike Boruchow
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