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Investing.com - TD Cowen has reiterated its Buy rating and $125.00 price target on Tapestry Inc. (NYSE:TPR), highlighting the company’s strong value proposition compared to traditional European luxury brands. The stock has shown remarkable momentum, delivering a 63% return year-to-date, with analyst targets ranging from $66 to $139. According to InvestingPro data, the company maintains a "GOOD" overall financial health score.
The firm notes that Tapestry’s Coach brand now has a price gap of 5-10 times compared to European luxury brands for fiscal year 2025, a significant increase from the 2-3 times gap observed in fiscal year 2009.
Despite this widening price differential, Coach’s average unit retail (AUR) for fiscal year 2025 is approaching the levels seen in fiscal year 2009, specifically in the North America retail bags category.
TD Cowen describes the theme of Tapestry’s investor day as "amplification," which involves scaling successful strategies and building on existing strengths to drive growth.
The firm’s analysis focuses on Tapestry’s two iconic brands: Coach, which represents 80% of revenue, and Kate Spade, which accounts for 17% of revenue in fiscal year 2025.
In other recent news, Tapestry, Inc. has announced a $3 billion share buyback program and set new financial targets through fiscal year 2028. The company plans to return $4 billion to shareholders by this time, supported by strong free cash flow, and aims for low double-digit earnings growth in fiscal years 2027 and 2028. During its 2025 Investor Day, Tapestry introduced its "Amplify" growth strategy, focusing on consumer connections, fashion innovation, and global experiences. Additionally, the board approved a $15 million special equity grant for CEO Joanne Crevoiserat, tied to performance and time-based stock units. Analyst firm Bernstein raised its price target for Tapestry to $112, citing strong performance despite tariff challenges. Meanwhile, Morgan Stanley maintained an Overweight rating with a $115 price target, highlighting the company’s favorable positioning despite recent stock pressure. These developments reflect a strategic focus on growth and shareholder returns.
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