Capri Will See EPS Beats In Future, Confident Analyst Upgrades Stock To Strong Buy

Raymond James analyst Rick B. Patel upgraded Capri Holdings Ltd CPRI to Strong Buy from Outperform at a price target of $60.
The analyst believes the company has laid the groundwork for future EPS beats and can benefit from multiple expansions and upward revisions.
Patel expects growth potential for CPRI, especially in the second half of FY24, as re-stocking inventory will likely lead to higher y/y sell-in into the wholesale channel.
He expects retail to continue outperforming on favorable brand health and product affinity.
The analyst has lowered the bar for FY24 results, following the Q3 earnings miss and below consensus guidance for FY24.
For Q4 FY23, Patel expects a revenue decline of 15% Y/Y compared to the consensus estimate of -14% Y/Y and the company guidance of a decrease of 14.5% Y/Y to $1.275 billion.
He expects EPS of $0.94 (vs consensus of $0.95 and guidance of $0.90-0.95), gross margin increase of 100 bps Y/Y to 64.7% (vs consensus of 64.9%) and operating margin of 8.5% (vs consensus of 8.6% and guidance of 8.5%) in Q4.
For Q1 FY24, the analyst projects EPS of $1.45 (vs consensus of $1.43) and revenue of $1.28 billion (vs consensus of $1.31 billion).
For FY24, he forecasts EPS of $6.09 (vs consensus of $6.12 and guidance of $6.40) and revenues of $5.75 billion (vs consensus of $5.77 billion and guidance of $5.8 billion).
Price Action: CPRI shares are trading higher by 1.39% at $45.84 on the last check Thursday.
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