Barclays upgrades Tapestry to ‘overweight,’ raises price target to $87

Investing.com — Barclays upgraded Tapestry Inc (NYSE:TPR) to “overweight” from “equal weight” and raised its price target to $87 from $57, given the company’s potential to gain market share and drive earnings growth.

The bank highlighted four key factors: strong brand positioning, disciplined inventory management, increasing customer acquisition among younger demographics, and a total shareholder return strategy focused on boosting earnings per share.

Barclays (LON:BARC) sees Tapestry well-placed to attract consumers trading up in the moderate segment and trading down from higher-end luxury brands, benefiting from pricing gaps created by steep price hikes at European luxury competitors.

Barclays raised its earnings estimates through 2027, driven by lower share counts from buybacks and improved sales. The higher price target reflects increased valuation multiples, supported by Tapestry’s TSR strategy and operational improvements.

Risks to the thesis include potential competition from Capri Holdings (NYSE:CPRI), peak gross margins, and macroeconomic volatility, Barclays added.