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New York-based Tapestry, Inc. (TPR) provides luxury accessories and branded lifestyle products around the globe. With a market cap of $16.2 billion, the company operates in Coach, Kate Spade, and Stuart Weitzman brand segments. These brands offer women’s handbags, women’s accessories, men’s products, and more.
Shares of TPR have significantly outpaced the broader market over the past 52 weeks. TPR has soared 93.2% over this period, while the broader S&P 500 Index ($SPX) has gained 8.6%. Moreover, shares of TPR are up 19.4% on a YTD basis, outpacing SPX’s 3.8% dip during the same time frame.
Looking closer, Tapestry has also outperformed the Consumer Discretionary Select Sector SPDR Fund’s (XLY) 13% surge over the past 52 weeks and 9.8% decline on a YTD basis.
Tapestry stock prices rose 3.7% following the release of its better-than-expected Q3 results on May 8. Driven by 12.9% growth in the Coach segment, revenue for the quarter came in at $1.6 billion, up 6.9% year-over-year and surpassing the Street estimate of $1.5 billion. Its adjusted EPS stood at $1.03, marking an increase of 27.2% from the year-ago quarter, and exceeded analysts’ estimates by 15.7%. Meanwhile, driven by strong engagement from Gen Z and Millennial consumers, Tapestry acquired over 1.2 million new customers in North America during the quarter.
Looking ahead to fiscal 2025, the company now expects revenue to come in at approximately $6.95 billion, reflecting 4% growth year-over-year. Moreover, it raised its adjusted EPS guidance from the previously announced range of $4.85 to $4.90 to $5, representing a high-teens percentage increase from the prior year.
Meanwhile, for the FY 2025, ending in June, analysts expect TPR's adjusted EPS to increase nearly 18% year-over-year to $5.06. Moreover, the company has a solid earnings surprise history. It beat the consensus estimates in each of the last four quarters.
Among the 21 analysts covering the stock, the consensus rating is a “Strong Buy.” That’s based on 14 “Strong Buy” ratings, two “Moderate Buys,” and five “Holds.”
This configuration is notably more bullish than three months ago, with only 13 “Strong Buy” and one “Moderate Buy” recommendations on the stock.
On May 9, Citigroup (C) analyst Paul Lejuez maintained a “Buy” rating on TPR, while raising the target to $94, significantly up from the previous target of $81.
As of writing, Tapestry’s mean price target of $86.80 implies an 11.3% premium to current price levels, while the Street-high target of $110 suggests a staggering 41% upside potential.
