Goldman Sachs Adds Tapestry to ‘Conviction Buy List’
Tapestry is Goldman’s “top idea”
Luxury handbag maker Tapestry (TPR), which owns handbag brands Coach and Kate Spade, was added to Goldman Sachs’ “conviction buy list” by analyst Lindsay Drucker Mann on Tuesday, December 5.
In a client note, Mann stated: “After a multi-quarter period of sluggish trends, we see a bottom forming in trends, and expect a mean reversion towards a mid-single digit long-term category run rate.”
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Tapestry is Goldman’s top idea in the group, based on two main reasons:
- strong same-store sales outlook coming from a strong holiday season
- expected earnings accretion arising from the Kate Spade integration
Mann assigned a $53 price target to Tapestry, reflecting an upside of 27% on Tuesday’s closing price of $41.65. The average target price by the 34 Wall Street analysts covering TPR is $48.55, which represents an upside of 17%.
Wall Street’s take on TPR
Wall Street has a positive to neutral view on Tapestry. The company is rated a 2.2 on a scale of 1.0 (“strong buy”) to 5.0 (“strong sell”). Notably, 59% of the analysts covering Tapestry recommend a “buy,” while 38% recommend a “hold,” and only 3% recommend a “sell” for the stock.
Susquehanna, Canaccord Genuity, and MKM Partners are among the brokers who recommend buying the stock, while Jefferies and Barclays suggest holding it.
Tapestry’s shares have surged 19% so far this year. The company has outperformed the S&P 500 Apparel and Accessories Index, which has returned 12.3% YTD (year-to-date), and the S&P 500 Index (SPX), which has returned 17.5% YTD.
Investors looking to invest in TPR through ETFs can choose to invest in the WisdomTree Dividend Ex-Financials Fund (DTN). Coach has a weight of ~1.1% in DTN.