Tapestry (TPR) is likely to lift its earnings per share forecast for the next 12 months amid a clearer sales growth path and the sale of its Stuart Weitzman footwear brand, Morgan Stanley said in a Friday note.
The company reported fiscal Q3 adjusted earnings Thursday of $1.03 per diluted share, up from $0.81 a year earlier, as net sales increased to $1.58 billion from $1.48 billion.
According to Morgan Stanley, Tapestry has put its target of over a mid-single-digit sales growth "more sustainably in view, noting the growth of its Coach brand in the last two quarters potentially extending through fiscal Q4.
In addition, the sale of Stuart Weitzman not only addresses multi-brand portfolio risk but is also expected to give fiscal 2026 gross margins a boost, the investment firm said.
Tapestry's management also reiterated the company's "tariff resilience" and the levies' "immaterial impact" on fiscal 2025 outlook, Morgan Stanley noted.
Morgan Stanley upgraded Tapestry's rating to overweight from equal-weight, with a higher price target of $90 from $75.
Price: 77.95, Change: +0.41, Percent Change: +0.53
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.