ISI Group Downgrades Coach to "Neutral" (COH)

ISI Group Downgrades Coach to “Neutral” (COH)


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 DARS™ Rating of 3.3 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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