Latest news with #Tapestry
Yahoo
7 hours ago
- Business
- Yahoo
Are Investors Undervaluing Tapestry, Inc. (NYSE:TPR) By 31%?
Tapestry's estimated fair value is US$122 based on 2 Stage Free Cash Flow to Equity Tapestry is estimated to be 31% undervalued based on current share price of US$84.33 Our fair value estimate is 37% higher than Tapestry's analyst price target of US$89.08 Today we will run through one way of estimating the intrinsic value of Tapestry, Inc. (NYSE:TPR) by taking the expected future cash flows and discounting them to today's value. This will be done using the Discounted Cash Flow (DCF) model. Don't get put off by the jargon, the math behind it is actually quite straightforward. We would caution that there are many ways of valuing a company and, like the DCF, each technique has advantages and disadvantages in certain scenarios. If you still have some burning questions about this type of valuation, take a look at the Simply Wall St analysis model. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. To begin with, we have to get estimates of the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, and so the sum of these future cash flows is then discounted to today's value: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF ($, Millions) US$1.15b US$1.20b US$1.33b US$1.43b US$1.52b US$1.60b US$1.68b US$1.74b US$1.81b US$1.87b Growth Rate Estimate Source Analyst x4 Analyst x4 Analyst x2 Est @ 7.68% Est @ 6.26% Est @ 5.26% Est @ 4.56% Est @ 4.08% Est @ 3.74% Est @ 3.50% Present Value ($, Millions) Discounted @ 8.4% US$1.1k US$1.0k US$1.0k US$1.0k US$1.0k US$985 US$950 US$912 US$872 US$832 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = US$9.7b We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 2.9%. We discount the terminal cash flows to today's value at a cost of equity of 8.4%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = US$1.9b× (1 + 2.9%) ÷ (8.4%– 2.9%) = US$35b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= US$35b÷ ( 1 + 8.4%)10= US$16b The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is US$25b. In the final step we divide the equity value by the number of shares outstanding. Relative to the current share price of US$84.3, the company appears quite good value at a 31% discount to where the stock price trades currently. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent. The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Tapestry as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 8.4%, which is based on a levered beta of 1.272. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. See our latest analysis for Tapestry Strength Debt is well covered by earnings and cashflows. Dividends are covered by earnings and cash flows. Weakness Earnings declined over the past year. Dividend is low compared to the top 25% of dividend payers in the Luxury market. Opportunity Annual earnings are forecast to grow for the next 3 years. Good value based on P/E ratio and estimated fair value. Threat Annual earnings are forecast to grow slower than the American market. Valuation is only one side of the coin in terms of building your investment thesis, and it shouldn't be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. What is the reason for the share price sitting below the intrinsic value? For Tapestry, there are three additional factors you should further research: Risks: To that end, you should be aware of the 3 warning signs we've spotted with Tapestry . Management:Have insiders been ramping up their shares to take advantage of the market's sentiment for TPR's future outlook? Check out our management and board analysis with insights on CEO compensation and governance factors. Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing! PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the NYSE every day. If you want to find the calculation for other stocks just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Forbes
2 days ago
- Business
- Forbes
Tapestry Stock Up 30%, What's Next?
Note: Tapestry's FY'24 concluded on June 29, 2024. Luxury fashion brand Tapestry (NYSE: TPR) has experienced a 27% increase year-to-date, significantly outperforming the S&P 500's 2% return and surpassing peer Ralph Lauren's (NYSE: RL) 15% growth. This momentum is driven by impressive Q3 earnings, exceptional results at Coach, and an upward adjustment to its full-year FY2025 forecast. The management has raised both revenue and EPS expectations, attributing it to improving gross margins and appeal to younger consumers. See Buy or Sell Tapestry Stock? Despite this optimistic outlook, TPR stock appears fully valued and perhaps overvalued. Trading at approximately $83, it presents limited upside when considering the company's mediocre long-term fundamentals and its susceptibility to downturns. Our evaluation—covering growth, profitability, financial stability, and resilience during downturns—provides a mixed perspective that ultimately renders TPR stock unappealing. However, if you are looking for upside with lower volatility compared to individual stocks, the Trefis High-Quality portfolio serves as an alternative—having outperformed the S&P 500 and yielding returns exceeding 91% since its inception. At first glance, Tapestry may seem modestly valued, boasting a price-to-sales ratio of 2.4, a price-to-free cash flow of 18.2, and a price-to-earnings of 21.7—all below the averages of the S&P 500. However, this discount reflects the company's sluggish growth and merely average profitability rather than being a hidden opportunity. Tapestry's revenue has been notably unimpressive. Tapestry has recorded a three-year compound annual growth rate of only 1.0%, significantly lagging behind the S&P 500's 5.5%. While revenue has increased by 2.7% over the past year to $6.9 billion and Q3 2025 showed an 8% year-over-year growth—outpacing the S&P's 4.8%—the long-term outlook remains weak for a brand aiming for premium global stature. Profitability metrics tell a comparable story. The 17.9% operating margin is reasonable, alongside its 12.5% net income margin that slightly surpasses the S&P's 11.6%. Its 14.9% operating cash flow margin aligns with the benchmark. While these numbers are commendable and reflect a middle-of-the-road performance, they do not support a case for multiple expansion. On a brighter note, Tapestry possesses a robust financial structure, with $4.1 billion in debt against a market capitalization of $17 billion—resulting in a manageable debt-to-equity ratio of 25.3% and a healthy 14.5% cash-to-assets ratio. This financial robustness allows the company to invest, return capital, or manage short-term challenges. This is where Tapestry's narrative takes a definite downturn: the stock has habitually underperformed the S&P 500 during significant downturns. It fell 46% during the 2022 inflation shock (compared to the index's 25% drop), plummeted 64% in the 2020 COVID crash (versus 34%), and decreased 78% in the 2008 financial crisis (against 57%). While it eventually recovered each time, the significant declines emphasize a concerning level of volatility, particularly alarming in today's unpredictable economic landscape. Our dashboard How Low Can Stocks Go During A Market Crash illustrates how key stocks performed during and after the last six market crashes. In summary, Tapestry rates neutrally on growth and profitability, strongly on financial stability, but very weakly on downturn resilience, resulting in an overall uninspiring profile. Despite recent price gains and what appears to be a fair valuation, the stock's unimpressive fundamentals and poor track record during previous market shocks render it a risky investment. While it would be advisable to steer clear of TPR stock at this time, you might consider the Trefis Reinforced Value (RV) Portfolio, which has outperformed its all-cap stocks benchmark (combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) while delivering strong returns for investors. What is the reason for this? The quarterly rebalanced mix of large-, mid-, and small-cap RV Portfolio stocks has offered a proactive means to capitalize on favorable market conditions while minimizing losses when markets decline, as detailed in RV Portfolio performance metrics.
Yahoo
4 days ago
- Business
- Yahoo
Stock Market Today: Stocks Higher; Investors Await the Fed
Stock Market Today: Stocks Higher; Investors Await the Fed originally appeared on TheStreet. Stocks moved higher in the first 90 minutes. At last check, the increases were 0.54% to 6,012 for the S&P 500, 0.66% for the Dow 30 to 42,479 and 0.55% for the Nasdaq-100 to 21,849. Leading the S&P 500 were TKO Group TKO the parent of World Wrestling Entertainment, up 4.7%, Jabil, () the provider of manufacturing services for electronics and other applications, up 3.7%, and Tapestry, () the parent of luxury brands including Coach, up 2.8%. Happy Fed Day! Will they or won't they? Actually, that's not really the question. The market is pricing in almost a 0% chance that the Federal Reserve moves on interest rates today. So, any move will be a huge surprise. The real question is what will the Fed say? About future moves, that is. Look for a statement from the Fed around 2 p.m. U.S. EDT today and a news conference with Chairman Jerome Powell 30 minutes later. This morning's economic reports include initial jobless claims and housing starts. Jobless claims dropped to 245,000 for the week of June 14, below expectations of 251,000. While the beat is good, this is near the highest levels of the year and indicates a cooling job market. (Normally the report comes out on Thursdays, but markets and government agencies will be closed for the Juneteenth holiday.) Housing starts were also below expectations, which in this case is not good. Starts were 1.26 million units on a seasonally adjust basis. The forecast was 1.36 million. Housing remains unaffordable for many Americans. So, how are markets reacting? Honestly, I think they're paying more attention to the Middle East and waiting for the Fed. Speaking of the Middle East, Iran's Ayatollah Ali Khamenei has said that he will not surrender to Israel. So, investors should not expect a quick end to this conflict. Futures are modestly higher this morning. S&P 500 futures are up 0.12%, while the tech-heavy Nasdaq is 0.2% higher. Bonds are rallying, too, although well off their highs of the day. The U.S. 10-year treasury note is up 0.04% and is priced to yield 4.38%. Crude oil continues tomarch higher on Middle East tensions. Thought of the day: It's the reaction to news that matters. And when expected relationships change, it's important to understand why and what that means. Here, Timmer shows that typical "risk off" reactions to news have changed. The U.S. is looking less like the safe haven it has always been for investors. Stock Market Today: Stocks Higher; Investors Await the Fed first appeared on TheStreet on Jun 18, 2025 This story was originally reported by TheStreet on Jun 18, 2025, where it first appeared. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
6 days ago
- Business
- Yahoo
GameStop, Tapestry, Crocs, Vertiv, and TTM Technologies Stocks Trade Up, What You Need To Know
A number of stocks jumped in the afternoon session after the major indices rebounded (Nasdaq +1.5%, S&P 500 +1.0%) as reports pointed to easing tensions between Israel and Iran. The Wall Street Journal said senior Iranian officials had signaled a willingness to restart stalled nuclear talks, on the condition that Washington refrain from joining Israel's ongoing strikes. This development triggered a significant decline in oil prices, easing inflation concerns. Also, it is possible some investors were buying the dip following the sell-off at the end of the previous week. The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Among others, the following stocks were impacted: Electronics & Gaming Retailer company GameStop (NYSE:GME) jumped 5.6%. Is now the time to buy GameStop? Access our full analysis report here, it's free. Apparel and Accessories company Tapestry (NYSE:TPR) jumped 6.9%. Is now the time to buy Tapestry? Access our full analysis report here, it's free. Footwear company Crocs (NASDAQ:CROX) jumped 5.1%. Is now the time to buy Crocs? Access our full analysis report here, it's free. Electrical Systems company Vertiv (NYSE:VRT) jumped 5.2%. Is now the time to buy Vertiv? Access our full analysis report here, it's free. Electronic Components & Manufacturing company TTM Technologies (NASDAQ:TTMI) jumped 5.3%. Is now the time to buy TTM Technologies? Access our full analysis report here, it's free. Tapestry's shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today's move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business. The previous big move we wrote about was 20 days ago when the stock gained 5.5% after the major indices rebounded (Nasdaq +2.0%, S&P 500 +1.5%) as President Trump postponed the planned 50% tariff on European Union imports, shifting the start date to July 9, 2025. Companies with substantial business ties to Europe likely had some relief as the delay reduced near-term cost pressures and preserved cross-border demand. Tapestry is up 28.7% since the beginning of the year, and at $84.48 per share, it is trading close to its 52-week high of $89.21 from February 2025. Investors who bought $1,000 worth of Tapestry's shares 5 years ago would now be looking at an investment worth $5,636. Unless you've been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNBC
6 days ago
- Business
- CNBC
Noted JPMorgan analyst sees shares of Coach retailer jumping more than 30%
A potential multi-year growth outlook for luxury brand Coach could be a key driver for Tapestry stock, according to JPMorgan. The firm reiterated an overweight rating on the fashion holding company stock, alongside a $104 per share price target. JPMorgan's forecast calls for about 32% upside from Friday's $78.91 close. Analyst Matthew Boss specifically pointed to an attractive growth profile for Tapestry's Coach brand as a potential growth catalyst for the stock. Boss also said Tapestry's past efforts to reach younger customers within its Coach brand has "reached critical scale" which is "more than offsetting prior declines in the customer file from more price-sensitive customers," which will help drive revenue. JPMorgan's Boss is one of the most followed analysts on Wall Street covering the retail sector. "To that point, management noted the newly acquired customer cohorts are from younger generations (Gen-Z/Millennials = greater lifetime value opportunity), transacting at higher [average unit retails], returning to the brand with higher purchase frequency rates & higher retention rates (vs. prior year and vs. prior customer cohorts), and are now beginning to influence older generations, which is also driving lapsed customer re-activation," Boss added. Shares have advanced nearly 21% in 2025.
