BMO: Coach Bag Michael Kors More
Shares of Coach (COH) have recently surpassed the broader market, up 5%; rival Michael Kors (KORS) has been outperforming the broader stock fall with a loss of 1.1%.
According to BMO Capital Markets, shares are likely to continue this trend.
Analyst John Morris has today initiated coverage of the two names, assigning a Outperform rating and $ 70 price target Coach and Market Perform rating and a target price of $ 65 in Michael Kors.
As for the coach, Morris wrote that he sees the shares as attractive valuations at this stage, especially as new leadership and talent of goods should the brand a shot in the arm. It also notes that it is encouraged by the improvement of the overthrow of society programming and provides strategic realignment of the company into a lifestyle brand as an opportunity to expand its product range. Asia is also a strong market and represents "a significant opportunity for international growth," he wrote.
However, Morris wrote that many of the head Kors is already cooked in the broth, despite its strong growth. He sees the stock going into a time of transition, where the margins are beginning to standardize on a slowdown in the momentum of the brand.
The coach is more than 20% since Barrons.com recommended actions in February, May, the shares still look cheap.