/Tapestry%20Inc%20phone%20and%20website%20by-%20T_Schneider%20via%20Shutterstock.jpg)
New York-based Tapestry, Inc. (TPR) is a prominent designer and marketer of apparel, fine accessories, and gifts for women and men. With a market cap of $8.8 billion, Tapestry operates through Coach, Kate Spade & Company, and Stuart Weitzman segments.
The luxury company has significantly underperformed the broader market over the past year. Over the past 52 weeks, TPR stock is down 7.3% compared to the S&P 500 Index’s ($SPX) 19.6% gains. Despite a 3.9% rally in 2024, TPR has lagged behind SPX’s 12% return on a YTD basis.
Narrowing the focus, TPR has also underperformed the S&P 500 Cons Disc Sector SPDR’s (XLY) 2.6% returns over the past 52 weeks. However, it has outperformed XLY's 2.5% decline on a YTD basis.
Tapestry’s underperformance over the past year relative to the broader market can be attributed to macroeconomic headwinds and uncertainties surrounding the acquisition of luxury company Capri Holdings Limited (CPRI), which was announced last year.
However, shares of Tapestry jumped 3.6% after its Q3 earnings release on May 9. Despite reporting a slight decline in revenue compared to the previous quarter, the company exceeded EPS estimates by an impressive 20.9%, delighting investors.
More recently, TPR stock fell by 2.6% on Aug. 2 due to the turbulence created in the global markets from the release of unemployment data by the Bureau of Labor Statistics. However, the stock rebounded by 4.5% on Aug. 8 driven by the market rally after unemployment insurance filings dropped more than anticipated.
For the current fiscal year (ended June 2024), due out on Aug. 15, analysts anticipate the company’s EPS to grow 9.3% annually to $4.24. The company’s earnings surprise history is mixed. It beat the consensus estimate in three of the past four quarters while missing the forecasts on another occasion.
Among the 18 analysts covering the TPR stock, the consensus rating is a “Moderate Buy.” That’s based on 12 “Strong Buy” ratings, one “Moderate Buy,” and five “Holds.”
This configuration is slightly more bullish than two months ago, with 11 analysts recommending a “Strong Buy.”
On Aug. 1, Telsey Advisory analyst Dana Telsey maintained a “Buy” rating with a price target of $54.
TPR’s mean price target of $49.23 represents a premium of 28.8% from current price levels. The street-high target of $60 indicates a potential upside of 56.9%.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
