Key Investor Takeaways from Tapestry’s 1Q18 Earnings

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Part 4
Key Investor Takeaways from Tapestry’s 1Q18 Earnings PART 4 OF 4

1Q18 Earnings: Minimal Impact on Tapestry’s Stock Price

Tapestry’s stock market performance

Tapestry’s (TPR) stock price was modestly affected by its first-quarter results. The stock inched 1.1% higher to close at $41.93 on November 7.

The company is currently sitting at a YTD (year-to-date) gain of 14.5%. In comparison, handbag rival Michael Kors’s (KORS) YTD returns are ~25%. The company rose close to 15% after delivering strong results on November 6.

1Q18 Earnings: Minimal Impact on Tapestry&#8217;s Stock Price

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PVH Corp (PVH) and VF Corp (VFC) are currently among the best-performing branded apparel and accessories stocks. The two companies have gained 37% and 30% so far this year, respectively.

However, Tapestry has outperformed the S&P 500 Apparel and Accessories Index, which is up 6.5% to date. Its performance is in line with the S&P 500 Index (SPX), up 16% YTD.

Analyst actions after 1Q18 results

There were no recommendation changes on Tapestry after 1Q18 results. However, J.P. Morgan raised its price target for the company to $45 from $43 while maintaining a “neutral” rating.

Ratings and recommendations

Tapestry is covered by 34 Wall Street analysts. Of these analysts, 62% recommend buying the stock, 35% recommend holding it, and 3% suggest selling it. On a scale of 1 (strong buy) to 5 (strong sell), the company is rated 2.2.

Tapestry has more “buy” ratings than handbag rival Kors (24%) and apparel peers Ralph Lauren (RL) at 9.5% and VFC at 39%. PVH, however, has been rated as a “buy” by 78% of analysts.

Susquehanna, MKM Partners, and Canaccord Genuity are among the brokers who recommend buying Tapestry while Jefferies and Barclays recommend holding it.

Tapestry stock could gain 22% over the next year

Tapestry is currently trading at $40.08—22% below its 52-week high price. Wall Street expects the company’s stock price to rise ~22% over the next year to $48.75.

Investors looking to invest in TPR through ETFs can choose to invest in the WisdomTree MidCap Dividend Fund (DON). TPR has a ~0.9% weight in DON’s portfolio.


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