Discussing Wall Street’s Take on Coach

Recommendation summary

The New York–based handbag manufacturer Coach (COH) is covered by 36 Wall Street analysts. The company has a high rating of 2.1, with 69% “buy,” 28% “hold,” and 3% “sell” recommendations. The company’s solid comeback after a period of lulling sales, declining margins, and deteriorating market share was behind Wall Street’s positive view on the company.

Discussing Wall Street’s Take on Coach

In comparison, competitor Michael Kors (KORS) is still struggling to recover. It’s rated a 2.9 on Wall Street.

Who’s positive on Coach?

MKM Partners, Buckingham, and Deutsche Bank are among the brokers who recommend buying Coach’s stock.

On September 12, Bernstein initiated coverage on Coach with an “outperform” rating. Analyst Jamie Merriman commented in a client note, “We believe the repositioning of Coach has been successful and will continue to drive positive comps.”

While talking about Coach’s recent acquisition of Kate Spade, he added, “There is clear opportunity to grow the Kate Spade brand, as well as drive synergies and deliver faster sales and earnings growth for the group.”

Barclays initiated Coach with “equal-weight”

On September 19, Barclays initiated coverage on Coach with an “equal-weight” rating.

While Analyst Chethan Mallela likes Coach’s core business, he looked cautious about Coach expanding into new territories to overcome the slowdown in the US handbag market. Mallela said investors need to be “mindful of the mixed track record that some apparel and accessories companies have had in expanding their offerings to new categories and geographies.”

Investors looking for exposure to Coach could invest in the First Trust RBA Quality Income ETF (QINC). Coach has a weight of ~3% in QINC.