Brokerages upbeat on Tapestry's margin growth, eyes on Capri deal
10/11/2023 14:02
** Analysts see Coach parent Tapestry's TPR.N ability to
drive profit momentum in qtr in a less-than-ideal environment as
encouraging
** TPR's Q1 results "despite a sales shortfall shows the
flexibility of the model" says Citi analyst Paul Lejuez
** Bernstein, which retained PT of $60, says "while we
slightly reduce FY top-line estimates partly due to demand
backdrop in North America (NA) and Asia, we foresee stronger
margin performance"
** Under a buyout deal with rival Capri CPRI.N since
August, TPR beat Q1 profit estimates on Thursday and maintained
2024 EPS target on the back of higher prices of its Tabby and
Coachtopia handbags
** We think Coach is performing well despite unsettled
economic conditions in China and a tough environment for apparel
and accessories in NA - Morningstar analyst David Swartz
** TD Cowen analysts believe the new Amazon partnership will
add new customers to TPR but Coach will need to be careful with
respect to assortment planning and pricing
** Shares of TPR down 1.2% at $27.94 premarket, CPRI dips
about 3%
** Jefferies analyst say softness in CPRI Q2 print pressures
their $8.5 bln deal outlook and brings expected accretion lower
** BMO analyst Simeon Siegel remains sidelined on TPR "as we
await clarity around the CPRI acquisition and gain a better
sense of the multiple investors will apply"
** Thirteen of 20 brokerages rate the stock "buy" or higher
and seven "hold"; their median PT is $40
** So far this year, TPR down ~26% while CPRI has declined
16%
(Reporting by Savyata Mishra in Bengaluru)
((Savyata.Mishra@thomsonreuters.com))