Cowen Downgrades Kate Spade (KATE) to Market Perform

November 22, 2016 6:12 AM EST
Get Alerts KATE Hot Sheet
Price: $17.97 -0.72%

Rating Summary:
    14 Buy, 7 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 35 | Down: 31 | New: 11
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Cowen downgraded Kate Spade (NYSE: KATE) from Outperform to Market Perform with a price target of $16.00.

Analyst Oliver Chen commented, "We continue to believe KATE has a healthy distribution footprint & is a highly attractive lifestyle brand which executes superbly across categories. We lower our rating as we're cautious on outlet & tourism pressure, a tepid handbag environment, & FY17 EPS estimates may be elevated. Valuation & risk/reward also appears fair as stock is at $16PT & may stay range-bound on caution pts."

He added, "We're hopeful that KATE has conservatively planned 4Q promotions which will include discounted items in Outlet in an effort to stimulate traffic. Our take is that factors outside of management's control may lead to risk at comps and margins in 4Q. Initiatives for next year--including an ongoing focus on micro-assorting to drive better traffic/conversion, sourcing & supply chain enhancements, improving fixed cost leverage, and continued expansion of licensing & partnerships--may not be enough to more than offset macro headwinds and materially drive improvement."

For an analyst ratings summary and ratings history on Kate Spade click here. For more ratings news on Kate Spade click here.

Shares of Kate Spade closed at $16.29 yesterday.

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