Ike Boruchow, an analyst from Wells Fargo, maintained the Buy rating on Tapestry (TPR – Research Report). The associated price target is $60.00.
Ike Boruchow has given Tapestry a Buy rating due to a combination of factors including the company’s recent earnings outperformance and management confidence. In the second quarter, Tapestry’s flagship brand Coach experienced a significant revenue and margin beat, exceeding Wells Fargo’s expectations. These strong results, coupled with higher full-year guidance on gross margins and earnings per share, have provided a solid foundation for the stock’s positive outlook. Additionally, management’s reaffirmation of their fiscal year 2025 targets has further bolstered investor confidence in the company’s trajectory, despite some weaknesses in other brand segments like KATE and Stuart Weitzman.
Boruchow’s optimism also hinges on the anticipated accretive impact of the upcoming CPRI deal, which is expected to close in 2024. The revised earnings projections for fiscal years 2024 and 2025 suggest a robust pro forma earnings per share growth for the new combined entity, factoring in the synergies and added interest from the merger. Boruchow sees potential for substantial earnings growth in the subsequent years post-merger, and the possibility of asset divestitures to deleverage the balance sheet adds another layer to the bull case for Tapestry. The analyst’s price target reflects these positive developments, with scenarios that justify significant upside for Tapestry’s stock valuation based on historical EBITDA multiples and merger benefits.
In another report released yesterday, TD Cowen also reiterated a Buy rating on the stock with a $52.00 price target.
TPR’s price has also changed slightly for the past six months – from $41.600 to $42.990, which is a 3.34% increase.
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Tapestry (TPR) Company Description:
Tapestry, Inc. engages in the provision of luxury accessories and lifestyle brands. It operates through the following segments: Coach, Kate Spade, Stuart Weitzman, and Corporate. The Coach segment consists global sales of coach brand products to customers through coach operated stores, including the internet and concession shop-in-shops, and sales to wholesale customers, and through independent third party distributors. The Kate Spade segment focuses on Kate Spade New York brand products to customers through Kate Spade operated stores, including the Internet, sales to wholesale customers, through concession shop-in-shops and through independent third party distributors. The Stuart Weitzman segment comprises Stuart Weitzman brand products primarily through Stuart Weitzman operated stores. The Corporate segment represents certain costs that are not directly distributed to a brand. The company was founded by Dawn Hughes in 1941 and is headquartered in New York, NY.
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