Merrill Lynch upgraded Coach (COH ) to buy from neutral.
Analyst Mark Friedman says the upgrade reflects increased confidence about business momentum in the near term, despite the external environment. He says the current multiple assumes a solid summer, but has not factored in what should be a great fall season.
Friedman notes a strong fall product assortment, solid traffic trends, and outstanding follow-up for spring 2004. He believes the handbag and accessories retailer can continue to buck retail trends on improving metrics, expanded assortments, and a continued intense focus on the customer.
He raised his 29 cents fourth-quarter earnings per share estimate to 32 cents, and upped the $1.80 fiscal 2004 (June) estimate to $1.90. He has a $60 price objective.