UBS maintains neutral Capri Holdings stock with $14 target

On Tuesday, UBS analyst Jay Sole maintained a Neutral rating on Capri Holdings stock (NYSE:CPRI), with a steady price target of $14.00. According to InvestingPro data, analyst targets for CPRI range from $14.00 to $52.11, with the stock currently trading at $18.45. The broader analyst consensus maintains a moderate buy recommendation with a 2.56 rating. Sole’s assessment anticipates that Capri Holdings is likely to report a fourth-quarter earnings per share (EPS) that aligns with market expectations. The forthcoming earnings report, scheduled for May 28, is expected to draw attention primarily to the company’s forward-looking guidance. InvestingPro analysis shows that while the company wasn’t profitable in the last twelve months, analysts expect positive earnings for the current fiscal year, with an EPS forecast of $1.03.

Sole suggests that Capri Holdings may choose not to provide fiscal year 2026 guidance due to the current uncertainties surrounding tariffs and the pending acquisition of Versace. This speculation is based on the trend observed among other companies in the Softline sector during this earnings season, which have refrained from issuing such long-term forecasts amidst similar uncertainties. According to Sole, the market has likely already adjusted its expectations to account for this possibility, leading to a balanced risk-reward scenario for Capri Holdings’ stock.

The analyst also noted the potential for significant stock price movement contingent on whether Capri Holdings decides to issue FY26 guidance. The options market is currently indicating an expected price fluctuation of approximately ±8.2% around the earnings announcement, which is slightly higher than the historical average move of 8.1%. This aligns with InvestingPro’s volatility metrics, showing a beta of 1.64 and significant price swings, with the stock trading between $11.86 and $43.34 over the past 52 weeks. Get access to 8 more exclusive InvestingPro Tips and comprehensive financial metrics with an InvestingPro subscription.

Sole’s commentary reflects an anticipation of a wide range of potential outcomes for the stock’s volatility in reaction to the upcoming earnings report and guidance. The market and investors are poised to closely monitor Capri Holdings’ financial disclosures and strategic plans for the future, which could have a notable impact on the company’s stock performance.

In other recent news, Capri Holdings announced a definitive agreement to sell the Versace brand to Prada (OTC:PRDSY) for $1.375 billion. This transaction is expected to close in the second half of 2025, aligning with Capri’s strategic move to streamline its brand portfolio. The sale, while below Bernstein’s expected valuation range, is anticipated to allow Capri to focus on its core brand, Michael Kors, and potentially reduce its debt. Additionally, Prada’s acquisition of Versace is seen as a strategic expansion in the luxury market, despite Versace operating at a loss.

In leadership updates, Capri Holdings will see a transition in its financial team as Thomas J. Edwards, Jr., the current CFO, will depart in 2025. Rajal Mehta, CFO of Michael Kors, will serve as the interim CFO. Furthermore, Capri has appointed Dario Vitale as the new Chief Creative Officer for Versace, effective April 1, with Donatella Versace transitioning to Chief Brand Ambassador. These changes reflect Capri’s ongoing efforts to optimize its operations and strengthen its market position.

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