Analyst Compares Coach (COH) Turnaround to J.C. Penney (JCP)

Wells Fargo maintained a Market Perform rating on Coach (NYSE: COH) with a price target of $44-$48. Comments follow weak Q3 results. Analyst Paul Lejuez compared the company to J.C. Penney (NYSE: JCP)

"Despite the headline beat, earnings quality was low, and U.S. comps decelerated to down 21% (and it does not seem that trends have improved in April). Management is in the midst of what it terms a multiyear journey and FQ3 again demonstrates the difficulties of transforming a brand," said Lejuez.

"The last time we saw an attempted transformation by elevating a brand accompanied by a down 20+% comp was from JCP in 2012, and that transformation didn't end well. While we do not view the COH brand/product in the same light as JCP, the continuing challenges confronting JCP in its transformation are relevant when thinking about the timeline and challenges COH may face as it attempts to bring in a new customer (while trying to balance that with maintaining the current customer)," he added.

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 $50.42 yesterday.

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