Coach Inc (NYSE: COH) is set to report first-quarter earnings on May 2, and at least two Wall Street forms are bullish on the handbag giant headed into the big day.

UBS's Take

According to UBS analyst Michael Binetti, the Coach bull case revolves around a return to growth in outlet sales.

“We think [full-price] store momentum has continued behind improved product/marketing, and if outlets accelerate, we think COH could be poised for more material EPS upside ahead,” Binetti explained.

Binetti said Coach received a critical head start on the competition when it began its brand-reset efforts several years ago, prior to the downturn in the handbag business. As a result, the strength of Coach’s brand has been on the rise, while other brands have struggled. Binetti believes this edge will give Coach unique pricing power compared to rivals Kate Spade & Co (NYSE: KATE) and Michael Kors Holdings Ltd (NYSE: KORS).

Baird's Perspective

Baird analyst Mark Altschwager expects Coach will reiterate its 2017 guidance when it reports earnings, but potential M&A deals could drive earnings upside in coming quarters.

“With more-visible earnings drivers (AUR tailwinds, SG&A leverage), steady execution, and a healthy dividend, we see attractive risk/reward at current levels,” Altschwager explained.

View more earnings on COH

Baird maintains an Outperform rating and $47 price target for Coach, while UBS has a Buy rating and $47 price target for the stock.

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