Redburn Atlantic upgrades Tapestry on Coach momentum

Investing.com -- Redburn Atlantic upgraded Tapestry (NYSE: TPR) Inc to Buy on strong brand momentum at Coach and renewed focus on organic growth following the collapse of its planned acquisition of Capri Holdings (NYSE: CPRI).

Analysts raised their earnings estimates, forecasting a 14.5% compound annual growth rate in earnings per share through 2028, up from their prior 5% estimate. The firm also set a new price target of $110, reflecting a 25% upside.

"We see brand heat building and this will allow the brand to continue elevating pricing, attract new and higher-end customers, and expand its reach into underpenetrated markets such as Europe," the note said, adding that Tapestry’s valuation remains attractive despite recent stock gains.

Redburn also highlighted the potential for a turnaround at Kate Spade, though it is not a core driver of their valuation. The firm expects management to focus on internal brand growth rather than acquisitions.

Despite Tapestry’s stock moving higher since October’s court ruling on Capri, Redburn sees room for further appreciation as the company executes its strategy.

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