Momentum Stock Watch: Tapestry, Inc. (TPR)

Company Profile:

Tapestry, Inc. provides luxury accessories and branded lifestyle products in the United States, Japan, Greater China, and internationally. The company operates in three segments: Coach, Kate Spade, and Stuart Weitzman. It offers women’s accessories, including handbags, such as wallets, money pieces, wristlets, and cosmetic cases; novelty accessories comprising address books, time management and travel accessories, sketchbooks, and portfolios; and key rings and charms. The company also provides bag collections, including business cases, computer bags, messenger-style bags, backpacks, and totes; small leather goods, such as wallets, card cases, travel organizers, and belts; and footwear, watches, fragrances, sunglasses, novelty accessories, and ready-to-wear for men. In addition, it offers women’s footwear; sunglasses; bracelets, necklaces, rings, and earrings; fragrances and watches; women’s seasonal lifestyle apparel collections, including outerwear and ready-to-wear, and cold weather accessories, which comprise gloves, scarves, and hats. As of July 2, 2022, the company operated through a network of 945 Coach stores, 398 Kate Spade stores, and 100 Stuart Weitzman stores. It sells its products through e-commerce sites and concession shop-in-shops, and wholesale customers, as well as through independent third-party distributors. The company was formerly known as Coach, Inc. and changed its name to Tapestry, Inc. in October 2017. Tapestry, Inc. was founded in 1941 and is headquartered in New York, New York.

Recent News:

The company reported fourth quarter GAAP EPS of $0.75, representing a year-over-year increase of 8%; delivered non-GAAP EPS of $0.78, up 20% versus prior year on a 13-week comparable basis. It returned approximately $1.9 billion to shareholders in fiscal 2022; board of directors approves 20% increase in Dividend.

The company expects to achieve revenue of $8 billion by fiscal year 2025, reflecting a three-year CAGR of 6% to 7%. It plans to return $3 billion incCapital to shareholders cumulatively through fiscal year 2025 via share repurchases and dividends, supported by the company’s strong free cash flow.

 

Fundamental Analysis:

Ninestocks analyzes several different financial aspects:

Price to Book Value – P/BV, a ratio used to compare book value to its current market price, to gauge whether a stock is valued properly.

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Price to Earnings – PE, the ratio for valuing a company that measures its current share price relative to its earnings per share (EPS).

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Discounted cash flow – DCF, a valuation method used to estimate the value of an investment based on its expected future cash flows.

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Return on Assets – ROA, indicates how profitable a company is in relation to its total assets, how efficiently uses assets to generate a profit.

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Return on Equity – ROE, a measure of financial performance calculated by dividing net income by equity. a gauge of profitability and efficiency.

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Debt to Equity – evaluate financial leverage, reflects the ability of equity to cover outstanding debts in the event of a business downturn.

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Conclusion:

TPR receives outperform rating in price to book value, price to earnings, discounted cash flow and debt to equity. Technical indicators signal the bullish signs, as there is a bullish crossover in the stochastic oscillator, the MACD is trying to back up and the RSI(14) stands at 53.6 with positive bias. We rate Tapestry, Inc. (TPR) a BUY.

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