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Investing.com - Raymond (NSE:RYMD) James has raised its price target on Tapestry Inc. (NYSE:TPR) to $115.00 from $85.00 while maintaining an Outperform rating on the luxury goods company. The stock, which has delivered an impressive 160% return over the past year, is currently trading near its 52-week high of $107.40, with a market capitalization of $22.1 billion.
The firm cited Tapestry’s multiple levers for topline growth, including momentum, innovation, premiumization, strong marketing, and go-to-market strategy, along with potential for further average unit retail and margin gains over the long term. According to InvestingPro data, the company maintains impressive gross profit margins of 75.09% and has demonstrated solid revenue growth of 2.67% over the last twelve months.
Raymond James expects Tapestry to achieve revenue growth of mid-single-digits in the fiscal fourth quarter, noting April grew 7%, in line with the strong fiscal third quarter performance. The firm’s promotional channel checks showed fewer year-over-year discounts for Coach and Coach Outlet, suggesting ongoing success in brand premiumization.
For fiscal year 2026, Raymond James raised its earnings per share estimates to $5.34 from $5.31 on higher margin assumptions, modeling 3% revenue growth compared to consensus estimates of 2%. The firm expects Coach to lead growth at 5% versus Street expectations of 4.5%, while projecting Kate Spade to decline 2% versus consensus estimates of a 3% drop.
The new price target reflects a target price-to-earnings ratio of 21.5x fiscal year 2026 estimates, which is above the 5-year average of 10x, as Raymond James views Tapestry as having "entered a new gear of stronger growth with Coach" while noting optionality on Kate Spade through either a turnaround or potential brand sale. Currently trading at a P/E ratio of 27.5x, InvestingPro analysis suggests the stock is trading above its Fair Value. For deeper insights into Tapestry’s valuation and 18 additional ProTips, access the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Tapestry Inc. has reported financial results that exceeded expectations, with both revenue and earnings surpassing analyst projections. This strong performance has led to several analysts revising their outlooks on the company’s stock. BMO Capital Markets increased its price target to $80, maintaining a Market Perform rating, while Citi raised its target to $94, continuing to recommend a Buy rating. Raymond James also adjusted its price target to $85, keeping an Outperform rating. Morgan Stanley (NYSE:MS) upgraded Tapestry’s stock rating from Equalweight to Overweight, raising the price target to $90 due to favorable developments influencing their previous neutral stance. The company’s Coach brand has shown notable sales momentum, contributing significantly to Tapestry’s overall performance. Bernstein reiterated its Outperform rating, citing sustainable momentum and the brand’s appeal to younger consumers. Despite these positive developments, the Kate Spade brand has not met expectations, though efforts to revitalize it are underway.
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