Goldman Sachs Upgrades Coach (COH) and Nordstrom (JWN), Downgrades JCP and DLTR

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Goldman Sachs is taking a more more constructive view of high-end retailers and step aside from those in the path of Wal-Mart (NYSE: WMT).

• Goldman upgraded Coach (NYSE: COH) from Neutral to Buy and raises their price target from $37 to $42.


• Goldman upgrades Nordstrom (NYSE: JWN) from Neutral to Buy and raises thier price target form $39 to $41.


• Goldman downgrades JC Penney (NYSE: JCP) from Neutral to Sell and lowers their price target from $36 to $32.


• Goldman downgrades Dollar Tree (Nasdaq: DLTR) from Buy to Neutral and lowers their price target from $54 to $52.

The firm said Nordstrom is a beneficiary of a recovering high end as they have nimbly adjusted their expenses, inventory and assortments. To fund this, they are recommend selling shares of JC Penney, as they see its margin-focused recovery rendering it a laggard in a top-line-obsessed market.

With margins and sales having hit an inflection point in 1Q2010, investors should focus on Coach's sector-leading +9% square footage growth and long-term opportunity in China.

On Dollar Tree they say SSS and EPS growth are likely to peak in 4Q and as the company faces increasingly difficult comparisons in 2010 they expect growth to slow.

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