Tapestry — Owner Of Fashion Brand Coach — Is A "Structural Pandemic Winner," Jefferies Says In Upgrade: What Else Impressed This Analyst?


Tapestry Inc TPR has been through a culture change focusing on data-driven results, which should continue to drive progress, according to Jefferies.

The Tapestry Analyst: Ashley Helgans upgraded the rating for Tapestry from Hold to Buy, while raising the price target from $30 to $45.

The Tapestry Thesis: The company’s financial profile has improved significantly and a new leadership team is in place, Helgans said in the upgrade note.

“The shift to high-margin channels (e.g. digital to 1/3, only 10% wholesale), increases in global AURs, and lower promos are helping margins expand +250bps in FY22E vs. FY19, while sales are +11%,” the analyst wrote. Luxury goods “tend to hold up better during recessionary periods due to the emotional nature of the purchase,” Helgans added.

While China represents a long-term opportunity, there is upside to near-term estimates as lockdowns in the country ease and “the gov't presumably adds stimulus,” Helgans mentioned.

TPR Price Action: Shares of Tapestry had risen by 4.59% to $33.05 at the time of publication Wednesday.

Photo: Sorbis via Shutterstock

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