ISI Group reported on Friday that they have reduced their rating on upscale accessory designer, Coach, Inc.(COH).
The firm has downgraded COH from a “Buy” to “Neutral,” and has lowered the company’s price target from $75 to $50. This price target suggests a 3% downside from the stock’s current price of $51.45.
An analyst from the firm commented, “on the heels of its first negative North America comp in over a decade (ex-recession), the company has announced a transformational decision to evolve Coach into more of a lifestyle brand. While this is absolutely the right thing to do and could pay huge dividends in the long-run, there are a few caveats accompanying this new strategy that elevate the risk profile in the near- and medium-term and will keep us on the sidelines until we see signs of the evolution taking hold.”
Coach shares were up 50 cents, or 0.98% during premarket trading Friday. The stock has declined -21% in the past year.
The Bottom Line
Shares of Coach (COH) have a 2.36% dividend yield, based on last night’s closing stock price of $50.90. The stock has technical support in the $46-$48 price area. If the shares can firm up, we see overhead resistance around the $53-$55 price levels.
Coach, Inc.(COH) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.3 out of 5 stars.