Coach (NYSE:COH) Stock Attractive on Valuation, Better Global Mix

UBS (NYSE:UBS) says they prefer a stock like Nike (NYSE:NKE) over Coach (NYSE:COH) at this time, but see their lower valuation attractive in light of the recent leveling of share price.

UBS says, "Holiday retail sales were solid—especially among upper-middle income consumers & in the outlet channel. Premium retailers (Tiffany's (NYSE:TIF) / Nordstrom (NYSE:JWN) / Saks (NYSE:SKS)) have been beating expectations lately. We are encouraged by read-thru’s for COH’s key channels & consumer demos. COH was armed with inventory (+36% Y/Y, +14% vs 2-yrs ago) heading into strong trends among its core demos in its most seasonally important qtr. We are raising our F2QE EPS to $0.98 from $0.94 (+6% US SSS est).

"While we prefer names like Nike (NYSE:NKE) (emerging mkts: 25% of revs) and RL (w/a China mix similar to Coach (COH) plus a large/growing Eur biz) today, COH's recent stock pullback & reasonable valuation vs global peers with an accelerating intern’l mix make the stock more attractive in our view. We would view a near-term pullback as an opportunity to review our Neutral stance."

UBS reiterates a "Neutral" rating on Coach, which closed Wednesday at $54.31, up $0.32, or 0.59 percent. UBS increased their price target on COH from $53 to $57.