In a report released yesterday, Oliver Chen from TD Cowen maintained a Hold rating on Capri Holdings, with a price target of $24.00.
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Oliver Chen has given his Hold rating due to a combination of factors influencing Capri Holdings’ current financial performance and future prospects. Despite the company’s efforts to return to revenue growth and expand margins, the recent earnings report showed a decline in revenue and gross margin, with adjusted EPS missing expectations due to a higher tax rate. However, there are positive signs, such as Michael Kors achieving positive full price comps and the company’s commitment to a $1 billion share buyback program.
Chen is cautiously optimistic about Capri Holdings’ potential for improvement, particularly with its focus on increasing full price sell-through and attracting younger consumers through strategic marketing and pricing adjustments. The sequential improvement in brands like Michael Kors and Jimmy Choo, along with a strategic shift in the outlet versus full price equation, are key areas being monitored. These factors contribute to the Hold rating, as the company navigates its path towards growth and margin expansion in the coming fiscal year.
Chen covers the Consumer Cyclical sector, focusing on stocks such as Tapestry, Kering SA, and LVMH Moet Hennessy Louis Vuitton. According to TipRanks, Chen has an average return of 6.2% and a 53.01% success rate on recommended stocks.
In another report released yesterday, Telsey Advisory also maintained a Hold rating on the stock with a $22.00 price target.