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Investing.com - UBS raised its price target on Tapestry Inc. (NYSE:TPR) to $112.00 from $73.00 on Monday, while maintaining a Neutral rating on the stock. The luxury fashion company, now valued at nearly $23 billion, has seen its shares surge over 185% in the past year. According to InvestingPro data, the stock is currently trading above its Fair Value, with impressive gross profit margins of 75%.
The investment firm cited robust fundamentals for Tapestry’s Coach brand during the fourth quarter and the start of the first quarter. UBS expects Tapestry to provide solid guidance for Q1 and fiscal year 2026. InvestingPro analysis reveals that 7 analysts have recently revised their earnings estimates upward, while the company maintains a moderate debt level and strong liquidity position.
The firm anticipates Tapestry will guide to Coach sales rising in the high single digits percentage in Q1 and mid-single digits for FY26. This should lead to FY26 earnings per share guidance of $5.45-$5.50 and Q1 EPS guidance of $1.10-$1.13, according to UBS.
UBS believes these guidance figures, along with a solid Q4 EPS beat, should drive modest upward revisions to the Street’s $5.44 FY26 EPS forecast and send the stock’s price-to-earnings ratio slightly higher.
If Tapestry’s guidance excludes Stuart Weitzman contribution due to the pending sale of the brand expected to close this summer, UBS would expect a FY26 EPS guide around $5.70-$5.75.
In other recent news, Tapestry Inc. reported financial results that exceeded expectations in both revenue and earnings. The company’s strong brand, particularly its Coach line, continues to drive growth, leading to sustained gross margin strength. BMO Capital Markets responded by raising its price target for Tapestry to $80, maintaining a Market Perform rating. Citi also increased its price target to $94, highlighting the strong performance of the Coach brand, which accounts for a significant portion of Tapestry’s sales. Analysts noted a 15% currency-neutral increase in Coach’s sales during the third quarter, following a 10% rise in the second quarter.
Raymond (NSE:RYMD) James adjusted Tapestry’s price target to $115, citing the company’s potential for topline growth through innovation and strong marketing strategies. Additionally, Bernstein reiterated its Outperform rating with a $100 price target, emphasizing the sustainable momentum of the Coach brand. The firm highlighted Coach’s success in attracting younger consumers, which is expected to contribute to the brand’s longevity. Despite these positive developments, the Kate Spade brand has not met expectations, although efforts to revamp it are underway.
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