Merrill Upgrades Coach to 'Buy'

Analyst Mark Friedman sees a solid summer, and a great fall season, for the handbag retailer

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.

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