Fannie Mae, Freddie Mac shares tumble after conservatorship comments
On Friday, Raymond (NSE:RYMD) James analyst Rick Patel reaffirmed an Outperform rating and a price target of $88.00 for Tapestry Inc. (NYSE:TPR), following investor meetings with the company’s leadership. The discussions with CEO Joanne Crevoiserat, COO/CFO Scott Roe, Global Head of IR Christina Colone, and Sr. Manager of IR Maddison Miller left the analyst with a heightened belief in the company’s growth prospects, especially for its Coach brand. According to InvestingPro data, the company maintains a "GOOD" overall financial health score, with particularly strong marks in profitability metrics.
Tapestry, known for its range of luxury accessories and lifestyle brands, has seen Coach’s revenue accelerate to a 10% increase in the second fiscal quarter, up from 2% in the first quarter. While Raymond James does not anticipate double-digit growth continuously, there is a new confidence that Coach could achieve a higher growth rate, potentially above mid-single digits, although the firm conservatively models a 3% growth for fiscal year 2026, aligning with the Street’s expectations. The company’s strong execution has contributed to an impressive 70% stock return over the past year, with InvestingPro showing robust gross profit margins of nearly 75%.
The analyst highlighted Tapestry’s sharp execution on product development, brand elevation, sourcing, and inventory management as key drivers for higher average unit retail (AUR) and gross margin (GM) percentage expansion. This successful strategy is believed to contribute to a beneficial cycle where strong revenue growth and improved gross margins allow for reinvestment in demand creation, further fueling top-line momentum.
Furthermore, the company’s growth and high margins are expected to generate robust free cash flow (FCF), which could support earnings-per-share (EPS) accretive buybacks and a growing dividend yield. In conclusion, Patel’s analysis suggests that Tapestry has strong momentum, which supports the reiterated Outperform rating.
In other recent news, Tapestry Inc. has been the focus of multiple analyst updates following its strong financial performance and strategic initiatives. Redburn-Atlantic upgraded Tapestry’s stock from Neutral to Buy, setting a new price target of $110, citing potential for sales growth and margin expansion. The firm highlighted Tapestry’s strong cash flow and anticipated earnings growth, particularly for its Coach brand. Similarly, JPMorgan raised its price target for Tapestry to $104, maintaining an Overweight rating. The firm noted significant growth driven by strategic investments in the Coach brand, which has shown substantial acceleration.
TD Cowen also adjusted its outlook, raising the price target to $90 while maintaining a Hold rating. The firm acknowledged Tapestry’s second-quarter results that surpassed expectations, largely due to the robust performance of the Coach brand. Telsey Advisory Group increased its price target to $92, keeping an Outperform rating, and emphasized Tapestry’s strong performance amid a challenging macroeconomic environment. The firm noted the company’s successful second quarter and raised fiscal year 2025 earnings guidance.
Lastly, Citi raised its price target to $85, reiterating a Buy rating, and expects Tapestry’s sales and earnings per share to outperform consensus estimates. The analyst highlighted the continuing strength of the Coach brand and anticipated further profit improvements from Kate Spade. Despite the stock’s significant rise, Citi sees potential for further growth, suggesting an opportunity for multiple expansion. These recent developments reflect a positive outlook from multiple analysts on Tapestry’s growth prospects and strategic execution.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.