Merrill Raises Coach Estimates

Analyst Mark Friedman says the handbag retailer offers an appealing, impressive product and brand momentum

Merrill Lynch raised its estimates on Coach (COH ).

Analyst Mark Friedman says the handbag retailer's results were in line with his above-consensus estimate. He says comparison-sales, or sales at stores open more than a year, rose about 13%, an outstanding holiday season, which reflected an appealing product and brand momentum. He notes sales in Japan also are robust with double-digit comparison sales increases, and cites strength at Coach's new Ginza store.

Friedman says he's confident about the momentum entering the Spring season, and he thinks the new handbag line is impressive in both design and breadth, which should enable Coach to stay strong through the back half of fiscal 2003 (June). Friedman upped the $1.35 fiscal 2003 earnings per share estimate to $1.42, and upped the $1.60 fiscal 2004 estimate to $1.67. He is keeping his buy rating and $40 price target.

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