Retail Stocks Hitting 52-Week Highs: Coach, Macy's, Men's Wearhouse, Carter's

NEW YORK ( TheStreet) -- Shares of retailers Coach ( COH), Macy's ( M), Men's Wearhouse ( MW) and Carter's ( CRI) reached 52-week highs Friday.

Each of these stocks got a buy rating from TheStreet Ratings.

Coach

The accessories retailer reported fiscal second-quarter earnings of $347 million, or $1.18 a share, on Jan. 24. That performance was up from earnings of $303 million, or $1 a share, in the same period a year earlier.

"We continue to believe that growth in the men's business is the underappreciated element of the COH story," KeyBanc Capital Markets analysts wrote in a Jan. 25 report. "The men's business is expected to more than double to $400 million this fiscal year. There are a number of reasons why we find the men's growth story compelling; with particular focus on its ability to both grow the existing U.S. retail business as well as strengthen COH's expansion opportunity abroad. Management noted that it hopes to achieve $1 billion in sales; we think this is achievable over the next two or three years."

Shares of Coach hit a 52-week high of $72.39 on Friday. The stock's 52-week low of $45.70 was set on Aug. 19.

Coach shares trade at a forward price-to-earnings multiple of 17.84. The average forward P/E among the clothing and accessories companies is 16.88. Hanesbrands ( HBI) has a forward P/E of 8.22; Jones Group ( JNI) has a forward P/E of 8.17.

Nineteen of the 29 analysts who cover Coach rated it a buy; 10 consider it a hold.

TheStreet Ratings gives Coach an A+ grade and has a $90.42 price target on the shares. The stock has risen 18.59% year to date.

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Macy's

Macy's announced some management changes on Wednesday. Ron Klein is retiring as chief stores officer. He is being succeeded by Peter Sachse, the chairman of Macys.com and chief marketing officer.

Macy's is scheduled to report its fourth-quarter results on Feb. 21. Analysts, on average, expect earnings of $1.63 per share on $8.7 billion in revenue.

"While we do see upside to near-term earnings & find the valuation compelling (~10x '12E EPS), we are reluctant to step in given the increasing difficult compares (2 yr 800 bps basis points more difficult), dangerous competitive environment, tenuous economic outlook & potential for SG&A growth to mute leverage & inhibit flexibility in a downturn," Sterne Agee analysts wrote in a report Thursday.

Shares of Macy's hit a 52-week high of $36.37 on Friday. The stock's 52-week low of $21.69 was set a year ago.

Macy's forward P/E is 11, which is less than half of the 27.71 average among broadline retailers. HSN ( HSNI) had a similarly low forward P/E of 11.34.

Fifteen of the 20 analysts who cover the company rated it a buy; five categorized it a hold.

TheStreet Ratings gives Macy's a B grade and has a $43.67 price target on the shares. The stock has increased 11.81% year to date.


Men's Wearhouse

The men's formal apparel retailer announced the approval of a 50% increase in its quarterly dividend on Jan. 19 to 18 cents a share. The higher dividend will be paid on March 23 to shareholders of record on March 23.

The company is scheduled to report its fourth-quarter results on March 7. Analysts, on average, anticipate a loss of 13 cents a share on $561.8 million.

Sterne Agee initiated coverage of Men's Wearhouse on Wednesday with a buy rating and $42 price target.

"We believe sales in the core business will benefit from new slimmerfit fashion trends favored by Millennials, which account for 25% of its sales, along with middle-aged consumers," the firm said. "We believe sales have also been aided by a replenishment cycle now under way in tailored goods."

Shares of Men's Wearhouse hit a 52-week high of $37.48 on Friday. The stock's 52-week low of $24.50 was set on Oct. 4.

Eight of the nine analysts who cover the company rated it a buy. One considered it a hold.

Men's Wearhouse's forward P/E is 14.28, which is slightly lower than the 15.14 average among the apparel retailers.

TheStreet Ratings gives Men's Wearhouse a B+ grade and has a $43.30 price target on the shares. The stock has risen 15% year to date.

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Carter's

The children's apparel retailer is scheduled to report fourth-quarter results on Feb. 27. Analysts, on average, anticipate earnings of 44 cents a share on revenue of $580.8 million.

"We believe it is only a question of when Carter's will be able to restore its gross margins to prior peak levels," Sterne Agee said in a report in early December. "Apart from falling cotton prices, its efforts to develop high-margin businesses in eCommerce, international and retail bode well for its margin structure. With a focus upon better controlled inventories including a new localization strategy, markdowns should be lower going forward."

Shares of Carter's hit a 52-week high on Friday of $43.17. The stock's 52-week low of $26.50 was set on March 2.

Seven of the 10 analysts who cover the company rate it a hold. Two consider it a buy and one gave it a sell rating.

Carter's forward P/E is 18.48, which tops the 16.98 average forward P/E for the clothing and accessories companies. Columbia Sportswear ( COLM) has a forward P/E of 13.88.

TheStreet Ratings gives Cater's a B grade and has a $54.71 price target on the shares. The stock has increased 7.94% year to date.

-- Written by Alexandra Zendrian in New York.

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