Investing.com -- UBS has upgraded its rating for Tapestry shares to Buy from Neutral and raised its price target 32% to $187, citing accelerating momentum at the Coach brand, stronger-than-expected Gen-Z customer acquisition, and the company's emerging status as an artificial intelligence leader within the retail sector.

Analyst Jay Sole said successful execution of a new customer acquisition strategy skewed toward younger consumers, rapid growth in Coach's Greater China region, an expanded total addressable market supporting the brand's sales sustainability, and Tapestry's ranking as "a top deployer of AI" in UBS's recent analysis are the reasons for the upgrade.

Sole raised his four-year EPS growth forecast to 13.5% from 5% previously, with his fiscal year 2027 and 2028 EPS forecasts now sitting 13% and 17% above consensus, respectively.

UBS also pointed to a 12% pullback in Tapestry's stock following its third-quarter results as an attractive entry point, with the shares now trading at just 14 times UBS's fiscal year 2028 EPS estimate.

The upgrade is also said to reflect the easing of two prior concerns. Sole told investors that Tapestry has demonstrated it can "comp the comp" in North America, and that its push into secondary categories such as footwear "has proven fruitful."

UBS additionally noted that investor appetite for high-quality growth stocks with strong gross margin profiles and limited oil price exposure plays directly to Tapestry's strengths.

The $187 price target is based on 20 times UBS's fiscal year 2028 EPS estimate of $9.35, implying upside of approximately 43%.