Coach Inc. shares rose 1% in premarket trading Monday after the company was upgraded to outperform from neutral at Baird Equity Research based on findings of its latest quarterly handbag survey showing strong purchase intent. Analysts raised the price target to $50 from $45. Baird analysts believe the survey results indicate growing demand for Coach handbags in the outlet channel. After 12 quarters of comparative sales declines, the bank expects comps to turn positive in the fiscal fourth quarter and remain in the positive low-single-digit range through fiscal 2017. “We believe improving demand among outlet shoppers (still a majority of business) would represent a key catalyst to drive shares higher from here,” the bank’s note said. “Footwear, men’s and Stuart Weitzman remain key growth drivers beyond the core handbag category.” Baird surveyed 500 women in the U.S., finding that 43% of women indicated “yes” or “maybe” when asked if they would purchase a handbag in the next three to six months, down from 44% last year. But the survey found purchase intent rose for both Coach and Vera Bradley Inc. . This is the second consecutive share gain for Coach, while other brands including Michael Kors Holdings Ltd. and Kate Space & Co. lost share of purchase intent. Coach shares up 32.8% for the past year while the S&P 500 is up 1.7% for the same period.
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