DCF Analysis for Coach

Having accompanied someone to Coach outlets in my time, I decided to look at Coach as an investment because the stores seem to be like the Apple store, except perhaps busier. Their gross margins are enormous: 72-73%. Everything they sell is made in China*. On the last conference call they specifically said they are forecasting lower margins in 2011 due to rising labor costs. I did a DCF (see attached) and I get $40.24 for value. See attached.Coach_DCF_Analysis

*note that someone could probably make handbags in the US, at the same price point, with lower, but still decent margins.
Disclaimer: I don’t own Coach stock but probably will purchase shares if the price goes below my DCF number.

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One Response

  1. […] for Coach revisited Posted on October 31, 2010 by jay cordaro| Leave a comment In my post DCF Analysis For Coach I opined that the the DCF value for Coach was $40.24. COH is trading above $50 now. I’m sure […]

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