Buy Sotheby's on a 2017 rebound in the art market, Cowen says

'Portrait of Two Boys' by Titian and studio, one of the first few double portraits in Renaissance painting, circa 1540, featured in an exhibition of Sotheby's Old Masters Sale at Sotheby's on December 2, 2016 in London.
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Cowen raised its rating on Sotheby's shares to outperform from market perform, saying the art auction company offers the most leverage to a potential industry recovery in 2017.

"We upgrade BID. ... We like ongoing modern transformation underway, capital light agency business model, stabilizing margin profile and favorable risk/reward given prospects of an improving art market," analyst Oliver Chen wrote in a note to clients Friday.

"We like demonstrated auction commission margin improvement in addition to improving sell-through statistics. Better sell-through rates indicate that current demand [is] healthy and prospects of acquiring superior inventory may follow."