UBS Reassesses Coach (COH) Rating
NEW YORK (TheStreet) -- UBS has reassessed its rating on Coach
"The bear case for Coach is clear: 1) US share losses driving -DD comp sales declines, 2) ongoing risk to COH's elevated GMs if share losses continue; 3) GM issues due to bloated inventories; 4) questions about whether current US store count needs to be reduced; 5) new Europe concerns (originally planned 70 new wholesale doors in FY14, now only 30)," analyst Michael Binetti wrote in the report.
A day earlier, the accessories retailer reported financials for the December-ended quarter which missed analysts' expectations. Net income for the second quarter was $297.4 million, down 15.6% from the year-earlier period. Earnings of $1.06 a share missed analysts' estimates of $1.11 a share, according to Thomson Reuters.
TheStreet Ratings team rates COACH INC as a Buy with a ratings score of B. The team has this to say about their recommendation:
"We rate COACH INC (COH) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
- You can view the full analysis from the report here: COH Ratings Report