CFRA Downgrades Tapestry Inc. (TPR) to Sell

CFRA analyst Zachary Warring downgraded Tapestry Inc. (NYSE: TPR) from Hold to Sell with a price target of $56.00 (from $54.00).

The analyst comments "We raise our 12-month price target by $2 to $56, based on 12.4x our FY 25 (Jun.) EPS estimate and above the company's five-year average forward P/E multiple, reflecting our view that the company has outperformed peers and is deserving of a higher multiple than in recent years. We maintain our FY 25 and FY 26 EPS estimates of $4.50 and $4.75, respectively. After a 50% increase in shares in less than three months, we now believe shares are overvalued and are due for a period of underperformance. Over the past three months, TPR's multiple has expanded from under 10x NTM EPS estimates to nearly 15x, which we believe to be an overshoot for a company growing at a 2% annual rate over the past five years. We believe the company will have a hard time expanding margins significantly from current levels after multiple years of operating efficiency improvements and think revenue growth will remain muted. We see little to drive shares higher outside of more expansion of the multiple and see better options in luxury."

For an analyst ratings summary and ratings history on Tapestry Inc. click here. For more ratings news on Tapestry Inc. click here.

Shares of Tapestry Inc. closed at $68.53 yesterday.

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