Tapestry's Coach Brand to Drive Growth, Stock Valuation Fairly Priced: BofA

Tapestry is relying on Coach for growth and the brand's Summer Sale will demonstrate its strength. However, BofA Securities believes the stock has surged 65% YTD and tariff mitigation efforts are timed well, leading to a neutral rating and a $44 price target.

Tapestry Inc. (NYSE: TPR), the parent company of luxury brands including Coach and Kate Spade, is leveraging Coach for growth, with the upcoming Summer Sale set to showcase the brand's strength. However, BofA Securities has issued a neutral rating on Tapestry's stock, citing a 65% year-to-date (YTD) surge and the timing of tariff mitigation efforts. The stock is currently valued at $44, according to the firm's latest assessment [1].

Analysts have shown diverse opinions on Tapestry's stock, with 14 analysts sharing their evaluations over the past three months. The majority of analysts are bullish, with 11 out of 14 rating the stock as "Outperform" or "Overweight." However, there is a notable range in price targets, from a low of $73 to a high of $145. The average price target is $97.21, an 11.47% increase from the previous average of $87.21 [2].

Matthew Boss of JP Morgan and Rick Patel of Raymond James are among the analysts who have raised their ratings, with Boss setting a price target of $145 and Patel at $115. Adrienne Yih of Barclays and Christine Dooley of Argus Research have also raised their ratings, with Yih setting a price target of $105 and Dooley at $92. Meanwhile, Jay Sole of UBS and Brooke Roach of Goldman Sachs have raised their ratings to "Neutral" and "Buy," respectively [2].

Tapestry's financial performance has been impressive, with a revenue growth rate of 6.89% in the last three months and a net margin of 12.83%. The company's Return on Equity (ROE) and Return on Assets (ROA) also exceed industry averages, indicating strong financial health. Additionally, Tapestry maintains a balanced debt approach, with a debt-to-equity ratio below industry norms [2].

Analysts provide valuable insights into the market's perception of a company, but their ratings should be used in conjunction with other financial metrics and data. Investors should stay informed and make data-driven decisions based on comprehensive analyses.

References:
[1] https://seekingalpha.com/news/4473343-tapestry-leans-on-coach-for-growth-but-stock-appears-fairly-valued
[2] https://www.benzinga.com/insights/analyst-ratings/25/07/46669268/14-analysts-assess-tapestry-what-you-need-to-know