Coach (COH) Stock Rises, Recieves Rating Upgraded at Baird

Coach (COH) stock rating was increased to 'outperform' from 'neutral' at R.W. Baird Monday morning.
By Annie Palmer ,

NEW YORK (TheStreet) -- Shares of Coach (COH) are surging by 2.84% to $43.50 as R. W. Baird upgraded the company's stock rating to 'outperform' from 'neutral' on Monday. 

The firm hiked its price target on the New York City-based luxury bag retailer to $50 from $45.

Coach sales have been weak compared to competitors, but Baird analysts believe they should improve in the fiscal fourth quarter and continue through 2017, MarketWatch reports.

"We believe improving demand among outlet shoppers (still a majority of business) would represent a key catalyst to drive shares higher from here," the firm continued in an analysts note. 

A 500-person survey conducted by Baird found that purchase intent is growing for Coach and Vera Bradley (VRA). The survey also showed that 43% of women indicated 'yes' or 'maybe' to a question asking whether or not they'd purchase a handbag in the next three to six months - a 1% decrease from 2015.

Other retail companies, such as Michael Kors (KORS) and Kate Spade (KATE) did not fare as well in purchase intent, the firm noted.

Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:

We rate COACH INC as a Hold with a ratings score of C. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and increase in net income. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

You can view the full analysis from the report here: COH

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