Tapestry, Inc.
TPR
$123.24
-5.38%
Tapestry, Inc. is a New York-based luxury fashion house that owns and operates the Coach, Kate Spade, and formerly Stuart Weitzman brands, with Coach contributing approximately 80% of fiscal 2025 revenue and over 90% of operating profit. The company is a market leader in the affordable luxury handbag and accessories segment, competing with the likes of LVMH and Kering, and is known for its strong brand equity and direct-to-consumer retail network. Currently, the stock is in focus due to its recent divestiture of Stuart Weitzman, strong revenue growth driven by Coach's global demand, and concerns over potential tariff headwinds that could pressure margins in the second half of fiscal 2027. The company is also navigating a post-COVID normalization in consumer spending and a recent sharp pullback in its share price, which has sparked debate about whether the sell-off presents a buying opportunity or signals underlying weakness.…
TPR
Tapestry, Inc.
$123.24
Related headlines
Investment Opinion: Should I buy TPR Today?
Based on the analysis, TPR is rated a Buy. The consensus analyst recommendation is 'Buy' with an average target price of $167.40, implying a 28.6% upside. The thesis is that Tapestry's strong revenue growth, driven by Coach, and attractive forward PE of 14.67x offer a favorable risk/reward, despite tariff risks.
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TPR 12-Month Price Forecast
The AI assessment is bullish with medium confidence. Tapestry's strong growth, attractive valuation, and positive analyst sentiment support a bullish stance. However, tariff risks and high leverage warrant caution. The stance would be upgraded if the company demonstrates resilience to tariffs, and downgraded if growth decelerates or margins compress significantly.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Tapestry, Inc.'s 12-month outlook, with a consensus price target around $167.40 and implied upside of +35.8% versus the current price.
Average Target
$167.40
0 analysts
Implied Upside
+35.8%
vs. current price
Analyst Count
—
covering this stock
Price Range
$96 - $232
Analyst target range
Tapestry is covered by 20 analysts, with a consensus recommendation of 'Buy' and a mean recommendation score of 1.77 (where 1 is Strong Buy and 5 is Sell). The average target price is $167.40, which implies an upside of approximately 28.6% from the current price of $130.17. The distribution of ratings is not explicitly provided, but the mean score and 'Buy' consensus indicate a bullish stance, with no analysts recommending Sell. The high target of $232.00 suggests that some analysts see significant upside potential, likely driven by expectations of continued strong growth from Coach and successful integration of the Stuart Weitzman divestiture, while the low target of $96.00 reflects concerns about tariff impacts and potential consumer spending slowdown. The wide range between the low and high targets (a spread of $136) indicates high uncertainty about the company's future performance, but the overall sentiment remains positive, with recent upgrades from UBS (from Neutral to Buy) and consistent Overweight ratings from JP Morgan. This suggests that institutional investors are becoming more optimistic about Tapestry's prospects, despite the recent stock price decline.
Bulls vs Bears: TPR Investment Factors
Tapestry presents a compelling bull case with strong revenue growth, attractive valuation, and analyst optimism, but faces significant bear risks from tariff exposure, high leverage, and recent price volatility. The evidence currently leans slightly bullish given the forward PE discount and robust growth, but the tariff issue is the key tension—if tariffs escalate, margins and earnings could be hit, undermining the bull thesis. The most important factor to watch is how management navigates tariff costs and whether Coach's growth can sustain the current valuation.
Bullish
- Strong Revenue Growth: Q3 FY2026 revenue grew 21.2% YoY to $1.92B, accelerating from prior quarters. This robust growth is driven by Coach's global demand, indicating strong brand momentum.
- Undervalued on Forward PE: Forward PE of 14.67x is at a discount to the luxury sector average, suggesting the market is not fully pricing in expected EPS growth of ~$10.31 for next fiscal year.
- Analyst Consensus Buy: 20 analysts rate TPR a 'Buy' with a mean score of 1.77 (1=Strong Buy). Average target price of $167.40 implies ~28.6% upside from current price of $130.17.
- High Gross Margin: Gross margin is 77.8%, reflecting strong pricing power and brand equity. This high margin provides a buffer against cost pressures and supports profitability.
Bearish
- Tariff Headwinds: News highlights tariff risks in H2 2027 that could pressure margins. With gross margin at 77.8%, any tariff impact could compress profitability significantly.
- High Debt-to-Equity: Debt-to-equity ratio of 5.71x is elevated, indicating high leverage. This increases financial risk, especially if interest rates remain high or earnings decline.
- Recent Price Decline: Stock fell from $164.78 (Aug 10) to $130.17 (Aug 21), a ~21% drop in two weeks. This sharp correction suggests investor concerns or profit-taking after a strong run.
- Dependence on Coach: Coach contributes ~80% of revenue and >90% of operating profit. This concentration risk means any weakness in Coach's brand or demand would significantly impact overall performance.
TPR Technical Analysis
Tapestry's stock has been in a strong long-term uptrend, with a 1-year price change of +32.3%, though it has recently pulled back sharply from its 52-week high of $164.80. As of August 21, 2026, the stock trades at $130.17, which is approximately 79% of its 52-week range (calculated as (130.17 - 93.0) / (164.8 - 93.0) = 0.79), indicating it is still in the upper half of its yearly range but well off the highs. This positioning suggests that while the long-term trend remains bullish, the recent correction has brought the stock closer to value territory, though it could also be a sign of momentum fading.
Beta
1.46
1.46x market volatility
Max Drawdown
-25.2%
Largest decline past year
52-Week Range
$93-$165
Price range past year
Annual Return
+22.0%
Cumulative gain past year
| Period | TPR Return | S&P 500 |
|---|---|---|
| 1m | -18.3% | +4.1% |
| 3m | -15.3% | +1.9% |
| 6m | -20.7% | +12.4% |
| 1y | +22.0% | +19.3% |
| ytd | -4.5% | +13.1% |
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TPR Fundamental Analysis
Tapestry's revenue has been growing robustly, with the most recent quarter (Q3 FY2026, ended March 28, 2026) reporting revenue of $1.92 billion, a 21.2% year-over-year increase. This growth is accelerating compared to the prior year's Q3 (revenue of $1.58 billion), and the company has consistently delivered revenue growth across recent quarters, with Q2 FY2026 revenue of $2.50 billion and Q1 FY2026 revenue of $1.70 billion. The growth is primarily driven by the Coach brand, which generated $1.70 billion in the latest quarter, while Kate Spade contributed $219.6 million, indicating Coach's dominance and the company's reliance on its flagship brand for growth.
Quarterly Revenue
$1.9B
2026-03
Revenue YoY Growth
+21.2%
YoY Comparison
Gross Margin
76.9%
Latest Quarter
Free Cash Flow
$1.8B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is TPR Overvalued?
Given that Tapestry is profitable, the primary valuation metric selected is the price-to-earnings (PE) ratio. The trailing PE is 19.49x, while the forward PE is 14.67x, implying that the market expects significant earnings growth in the coming year. The gap between trailing and forward PE suggests that analysts anticipate a substantial increase in EPS, which is supported by the estimated EPS average of $10.31 for the next fiscal year, up from the trailing EPS of approximately $6.68 (calculated from net income of $1.38 billion and shares outstanding of 202.5 million). This forward PE is at a discount to the sector average, as the luxury goods industry typically trades at higher multiples, making Tapestry appear undervalued relative to its growth prospects.
PE
19.5x
Latest Quarter
vs. Historical
High-End
5-Year PE Range 7x~21x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
15.4x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: Tapestry's high debt-to-equity ratio of 5.71x indicates significant leverage, which could strain cash flows if interest rates rise or earnings decline. The company's reliance on Coach for over 90% of operating profit creates concentration risk, as any brand-specific issue could disproportionately impact results. Additionally, the recent divestiture of Stuart Weitzman may lead to short-term operational disruptions, though it simplifies the portfolio. The net margin of 19.1% is healthy, but tariff costs could compress it, especially given the company's exposure to imported goods.
FAQ
The key risks are: 1) Tariff headwinds that could compress margins, 2) High debt-to-equity ratio of 5.71x, 3) Dependence on Coach for the majority of profits, and 4) Market volatility with a beta of 1.464. The most severe risk is a tariff escalation that could significantly reduce earnings, potentially leading to a drop to the 52-week low of $93.
The 12-month forecast is bullish, with a base case target of $150-$170 (50% probability), bull case of $167-$232 (30% probability), and bear case of $93-$120 (20% probability). The most likely scenario is the base case, where revenue growth continues at a healthy pace and the stock reaches the analyst average target of $167.40. Key assumptions include stable margins and no major tariff escalation.
TPR is currently undervalued based on its forward PE of 14.67x, which is below the luxury sector average. The trailing PE of 19.49x is also reasonable. The PEG ratio of 0.025 suggests the stock is very cheap relative to its growth rate. The market appears to be pricing in some tariff risks, but the valuation implies expectations of strong earnings growth, which seems justified given the recent revenue acceleration.
TPR appears to be a good buy for investors with a medium-to-long-term horizon, given the 28.6% upside to the average analyst target of $167.40. The forward PE of 14.67x is attractive relative to growth, and the company has strong free cash flow. However, the stock is not without risks, including tariff exposure and high debt. For risk-tolerant investors, it could be a good addition, but those with lower risk tolerance may want to wait for more clarity on tariffs.
TPR is more suitable for long-term investment due to its growth potential and brand strength. The stock has a beta of 1.464, indicating higher volatility, which may not suit short-term traders. The company pays a dividend with a yield of 1.09%, providing some income. A minimum holding period of 2-3 years is recommended to ride out market fluctuations and benefit from earnings growth.