For investors seeking opportunities in the luxury goods sector, Tapestry, Inc. (NYSE: TPR) stands out as a compelling option. With a current market capitalization of $13.23 billion, Tapestry, which encompasses renowned brands such as Coach, Kate Spade, and Stuart Weitzman, is well-positioned in the consumer cyclical sector. Its product line is diverse, ranging from women’s handbags and accessories to men’s bags, footwear, and lifestyle products, catering to a global customer base.
Tapestry’s current stock price is $63.92, which lies within its 52-week range of $36.29 to $89.21. Despite a slight recent decline of 0.05%, analysts project significant growth potential, with the average target price set at $87.14. This suggests a promising upside of approximately 36.33%, an enticing prospect for investors.
The company’s valuation metrics indicate a forward P/E ratio of 11.92, which may imply that the stock is undervalued compared to future earnings prospects. Although other valuation measures such as PEG, Price/Book, and EV/EBITDA are not available, the forward P/E suggests that expectations for earnings growth are favorable.
Tapestry’s performance metrics further underscore its robust financial health. The company has achieved a revenue growth of 5.30% and boasts an impressive return on equity of 39.82%, reflecting efficient management and strong profitability. The free cash flow stands at $593.5 million, providing Tapestry with the flexibility to reinvest in growth opportunities or return value to shareholders through dividends and buybacks.
Investors will also appreciate Tapestry’s dividend yield of 2.22%, supported by a payout ratio of 40.70%, which balances shareholder returns with the need for reinvestment. This dividend yield offers a reliable income stream, enhancing the stock’s appeal to income-focused investors.
Analyst sentiment is largely positive, with 14 buy ratings, 8 hold ratings, and no sell ratings, reflecting confidence in Tapestry’s strategic direction and market positioning. The target price range of $59.84 to $110.00 suggests varied opinions on the stock’s potential, yet the average target underscores a bullish outlook.
From a technical perspective, the stock’s 50-day moving average of $76.17 contrasts with its 200-day moving average of $56.86, indicating recent volatility. The RSI (14) at 33.38 suggests that the stock might be approaching oversold territory, potentially signaling a buying opportunity. However, the MACD of -3.27 below the signal line of -2.62 warrants caution, as it highlights recent bearish momentum.
Tapestry’s international footprint, with operations in North America, Greater China, and other regions, positions it well to capitalize on global luxury demand. Its strategic use of retail, e-commerce, and third-party distributors underlines its adaptive business model in a rapidly changing retail landscape.
Founded in 1941 and headquartered in New York City, Tapestry has evolved significantly, rebranding from Coach, Inc. to Tapestry, Inc. in 2017. This reflects its broader ambition to encompass a portfolio of iconic brands.
For investors considering exposure to the luxury goods industry, Tapestry, Inc. offers a balanced mix of growth potential, income, and brand strength. The projected upside and strong financials make it a noteworthy consideration for portfolios focused on consumer discretionary stocks.
