Tapestry impresses analysts with strong pricing, diversified geographic footprint
cemagraphics/iStock via Getty Images
Tapestry (NYSE:TPR) was viewed favorably on Wall Street following its FQ3 earnings report.
Bank of America noted that North American softness was offset by China outperformance by Tapestry (TPR) in the quarter.
Analyst Lorraine Hutchinson and team reiterated a Buy rating with Tapestry's (TPR) globally diverse operating model said to serve as a key advantage amid a softening North America backdrop.
"We expect consistent strong EPS growth, driven by a stable and growing Coach brand and comp improvement and margin expansion at Kate Spade. We expect the multiple to expand as investors become more comfortable with the margin profile of both core businesses."
BofA also expects Tapestry (TPR) to continue to return capital to shareholders in an accelerated manner due to the strong free cash flow generation. The firm assigned a price objective of $55 to Tapestry (TPR).
Wells Fargo also stayed bullish on Tapestry (TPR) with an Overweight rating backed. Analyst Ike Bochurow called the TPR print a needed sigh of relief. The bigger picture view is that TPR's diversified geographic footprint is helping to mitigate softness in North America, and pricing dynamics appear sticky. For TPR, the lack of exposure to U.S. wholesale is also seen as a key positive due to ongoing weakness in that channel.
Shares of Tapestry (TPR) moved up 0.25% on Friday during the premarket session after a 8.27% rise on Thursday.