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In a challenging economic climate, Capri Holdings Limited (NYSE:CPRI), the parent company of the renowned fashion brand Michael Kors, has seen its stock price touch a 52-week low, dipping to $30.34. This downturn reflects a broader trend in the luxury goods sector, which has faced headwinds from reduced consumer spending and global supply chain issues. Over the past year, the company's stock has experienced a significant decline, with a 1-year change showing a decrease of 42.57%. Investors and analysts are closely monitoring the company's strategies to navigate through these market pressures and revitalize its brand portfolio in the hope of a rebound.
In other recent news, Capri Holdings has been the subject of significant developments. The company reported a decline in fourth-quarter revenue by 8.4% to $1.223 billion, falling short of the analyst consensus estimate of $1.29 billion. Its adjusted earnings per share for the quarter also missed analysts' expectations, standing at $0.42, below the analyst estimate of $0.67. Amid these outcomes, Wells Fargo upgraded the stock's rating from Equal Weight to Overweight, setting a new price target at $43.00, down from $57.00. The firm's analysis suggests a favorable risk/reward balance for Capri Holdings.
In contrast, Jefferies revised its outlook on Capri Holdings, reducing the stock price target to $38 from the previous $57, while maintaining a Hold rating on the stock. This adjustment came after the company's fourth-quarter sales and earnings per share significantly fell short of analysts' expectations. Meanwhile, Citi upgraded Capri Holdings' stock rating from Neutral to Buy, setting a revised price target at $41, down from the previous $56. The analyst's optimism is partly based on an ongoing acquisition deal where Tapestry (NYSE:TPR) Inc. has agreed to purchase Capri Holdings at $57 per share.
The acquisition deal has already gained approval in Europe and Japan, but it met a roadblock in the United States when the Federal Trade Commission filed a lawsuit to challenge it, with a trial set for September. Despite this, Tapestry management remains committed to the acquisition, expressing skepticism about the merits of the FTC's lawsuit. These are the recent developments that have shaped the narrative around Capri Holdings.
InvestingPro Insights
In light of Capri Holdings Limited's (CPRI) current market challenges, real-time data and insights from InvestingPro reveal critical aspects of the company's financial health and stock performance. According to InvestingPro, CPRI boasts impressive gross profit margins, with data from the last twelve months as of Q1 2025 showing a robust 64.22%. Despite facing revenue declines, with an 8.75% decrease in the same period, analysts predict that the company will be profitable this year, which could signal a potential turnaround for investors considering the stock's recent struggles.
InvestingPro Tips indicate that while the stock price has been volatile and has taken a substantial hit over the last six months, resulting in a 35.71% decline, the net income is expected to grow this year. This could be a silver lining for investors who are enduring the stock's trading near its 52-week low, with the price at the previous close marked at $30.54.
The market cap of CPRI stands at $3.59 billion, and while the stock does not pay a dividend, which may be a consideration for income-focused investors, the InvestingPro Fair Value estimate is at $25.9, which is below the current trading level. This suggests that the stock might be overvalued at its current price, although it's worth noting that analyst targets have set a fair value at $49.5, indicating a more optimistic outlook.
For those interested in a more in-depth analysis, there are additional InvestingPro Tips available that could provide further guidance on CPRI's stock. These tips and metrics offer valuable insights for investors looking to make informed decisions in a volatile market.
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