JFrog stock rises as Cantor Fitzgerald maintains Overweight rating after strong Q2
On Friday, Citi analyst Paul Lejuez increased the price target for Tapestry Inc. (NYSE:TPR) shares to $94 from the previous target of $81, while continuing to recommend a Buy rating for the stock. The upgrade comes as TPR shares have delivered an impressive 97% return over the past year, according to InvestingPro data. Lejuez highlighted the sustained strong performance of the company’s core Coach brand, which constitutes 75% of Tapestry’s sales. Coach’s sales momentum has been notable, with a 15% currency-neutral increase in the third quarter, building on a 10% rise in the second quarter, alongside improved EBIT margins.
The analyst pointed out that management has not observed any slowdown in sales across any region quarter-to-date compared to the third quarter, despite an uncertain economic environment. However, the Kate Spade brand has not met expectations, though efforts to revamp the brand are just beginning.
Lejuez emphasized the importance of the Coach brand to Tapestry’s free cash flow (FCF) generation capabilities. He projects that by fiscal year 2026, Tapestry could generate approximately $1.3 billion in FCF, translating to a free cash flow yield of around 7% on enterprise value (EV). Additionally, the company is expected to continue its substantial cash returns to shareholders, having recently completed a $2 billion accelerated share repurchase (ASR) program.
The analyst expressed confidence in Tapestry’s potential to surpass consensus estimates in the fourth quarter and beyond, and anticipates the stock to keep outperforming the market. With analyst targets ranging from $62 to $110 and an overall "Buy" consensus rating, the market appears optimistic about TPR’s prospects. The raised price target reflects these positive expectations and the company’s robust financial outlook, supported by its "GOOD" Financial Health Score on InvestingPro, which offers 12 additional valuable insights about the company’s performance and valuation.
In other recent news, Tapestry Inc. reported robust financial results for the third quarter of fiscal year 2025, exceeding analysts’ expectations with an earnings per share (EPS) of $1.03 compared to the forecast of $0.88. The company’s revenue also surpassed predictions, reaching $1.6 billion against the anticipated $1.53 billion. Tapestry raised its fiscal 2025 revenue guidance to $6.95 billion, reflecting a 4% growth. Morgan Stanley (NYSE:MS) upgraded Tapestry’s stock rating to Overweight, increasing the price target to $90 from $75, citing favorable developments and anticipated positive revisions in near-term earnings per share. Raymond (NSE:RYMD) James also adjusted its price target for Tapestry, raising it to $85 from $74 while maintaining an Outperform rating. These upgrades reflect increased optimism about Tapestry’s financial performance and future prospects. The company achieved a gross margin of 76.1%, the highest in over 15 years, underscoring its strong operational performance. These recent developments highlight Tapestry’s strategic initiatives and competitive positioning in the luxury market.
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