Nomura Securities Maintains a 'Buy' on Coach (COH); A Factory Channel Mistake?

August 1, 2012 10:03 AM EDT
Get Alerts COH Hot Sheet
Price: $35.21 -1.46%

Rating Summary:
    21 Buy, 24 Hold, 3 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 11 | Down: 21 | New: 54
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Nomura Securities maintains a 'Buy' on Coach (NYSE: COH) price target of $64.00 (from $74.00).

Analyst, Paul Lejuez, said, "While the overall US retail comp of +1.7% was disappointing, we believe the stock decline could have been much less severe if management had framed things differently. We are not saying they should have tried to fool us with their words, but rather it is our belief that the fundamentals do not warrant the decline in the stock we saw post earnings. In addition to weak factory comps (down ~1% in 4Q), the following contributed to the stock’s decline: (1) Referring to F13 as an "investment year", (2) Fears of US market share loss, and (3) Calling out 1Q as likely to be weak, despite launching Legacy in full price stores. None of these are likely to reverse near term, but all have counterpoints. The stock looks too inexpensive to us for what you get."

4Q12E EPS from $0.87 to $0.86; F12E EPS from $3.54 to $3.53; F13E EPS from $4.12 to $3.86.

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

Shares of Coach closed at $49.33 yesterday.

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