Coach (COH) Stock Slumping After New 'Underweight' Rating

NEW YORK (TheStreet) -- Shares of Coach Inc  (COH) were down 5.2% to $34.66 on heavy volume in late morning trading Wednesday, after analysts at BB&T Capital started coverage on shares of the handbag designer late Tuesday.

The firm initiated coverage with an "underweight" rating after the closing bell yesterday, saying it has concerns regarding the progress of the company's turnaround.

BB&T analysts added that they believe shares are not pricing in a more competitive and promotional environment.

Additionally, shares of peer Michael Kors Holdings (KORS) were falling as much as 18.9% this morning after reporting its slowest quarterly revenue growth since going public in December of 2011.

Michael Kors pointed to lower tourist traffic, weak watch demand and shipping delays due to West Coast port disruptions for its earnings miss.

About 4.73 million shares of Coach have exchanged hands as of 10:59 a.m. ET today, compared to its average trading volume of about 4.05 million shares a day.

New York City-based Coach is a design house of modern luxury accessories and lifestyle collections, offering premium lifestyle accessories to a loyal and engaged customer base and provides consumers with products that use a broad range of leathers, fabrics and materials.

Separately, TheStreet Ratings team rates COACH INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate COACH INC (COH) a HOLD. 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 reasonable valuation levels, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity."

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