Opinions
Jim Cramer - Mad Money
Tapestry Inc.
TPR-N
SELL
Mar 10, 2025
Stock price when the opinion was issued
You might be interested:
Got an analyst upgrade today and the stock surged and lifted the entire retail clothing sector. He prefers tried-and-true Lululemon though.
Premium contentStockchase Research Editor: Michael O'Reilly TPR is an international manufacturer of luxury items that include the Coach and Kate Spade brands. They have built cash reserves back above $2 billion during the pandemic, while paying down debt. They trade at 16x earnings, compared to peers like RL at 49x. They have re-instated the dividend at a good yield, while keeping the payout ratio under 50% of cash flow. We would buy this with a stop loss at $30, looking to achieve $53.50 -- upside potential over 29%. Yield 2.45%. (Analysts’ price target is $53.13)
Premium contentPremium contentSome high-end names like Louis Vuitton have not been doing well. But TPR has been performing decently. Above 200-day MA, which is moving higher. Mid-high luxury, and that part of the market is doing better. Could be that the ultra-rich are "downshifting" into names owned by this brand.
15.5x forward PE, slightly above 10-year historical norms for this name. 9-10% growth. So valuation is decent. Investors should be cautious about impact of a downturn in the economy on this type of name.
His favourite in this space is Ralph Lauren which collapsed today, and TPR is not better than RL. TPR will go lower in this market.