A significant driver of top-line growth: Tapestry Inc. (TPR)

Tapestry Inc. (NYSE: TPR) stock jumped 2.01% on Wednesday to $36.96 against a previous-day closing price of $36.23. With 3.47 million shares changed hands, the volume of the stock remained lighter than its average volume of 3.64 million shares. The 52-week range on TPR shows that it touched its highest point at $46.58 and its lowest point at $26.39 during that stretch. It currently has a 1-year price target of $43.47. With its current market cap of 8.88 billion, TPR has annualized dividend of $1.20 while the current yield stands at 3.25%. Beta for the stock currently stands at 1.39.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of TPR was up-trending over the past week, with a rise of 7.60%, but this was up by 15.64% over a month. Three-month performance surged to 0.52% while six-month performance rose 17.26%. The stock lost -19.63% in the past year, while it has lost -8.97% so far this year. A look at the trailing 12-month EPS for TPR yields 3.15 with Next year EPS estimates of 4.17. For the next quarter, that number is 1.26. This implies an EPS growth rate of 21.40% for this year and 14.69% for next year. EPS is expected to grow by 13.85% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 8.70%.

Float and Shares Shorts:

At present, 241.50 million TPR shares are outstanding with a float of 240.35 million shares on hand for trading. On Oct 13, 2022, short shares totaled 12.81 million, which was 5.29% higher than short shares on Sep 14, 2022. In addition to Ms. Joanne C. Crevoiserat as the firm’s Pres, CEO & Director, Mr. Todd Kahn serves as its CEO & Brand Pres of Coach.


Institutional Ownership:

Through their ownership of 92.95% of TPR’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 57.33% of TPR, in contrast to 39.12% held by mutual funds. Shares owned by individuals account for 0.96%. As the largest shareholder in TPR with 12.30% of the stake, The Vanguard Group, Inc. holds 29,774,386 shares worth 29,774,386. A second-largest stockholder of TPR, JPMorgan Investment Management, I, holds 13,234,729 shares, controlling over 5.47% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in TPR, holding 11,625,490 shares or 4.80% stake. With a 2.99% stake in TPR, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 7,227,511 shares are owned by the mutual fund manager. The Vanguard Small Cap Index Fund, which owns about 2.57% of TPR stock, is the second-largest Mutual Fund holder. It holds 6,224,178 shares valued at 197.18 million. Vanguard 500 Index Fund holds 2.38% of the stake in TPR, owning 5,763,509 shares worth 182.59 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for TPR since 23 analysts follow the stock currently. There are 12 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 6 believe that the stock is worth HOLDING, 5 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With TPR analysts setting a high price target of $60.00 and a low target of $33.00, the average target price over the next 12 months is $43.47. Based on these targets, TPR could surge 62.34% to reach the target high and fall by -10.71% to reach the target low. Reaching the average price target will result in a growth of 17.61% from current levels.


EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. TPR will report FY 2023 earnings on 08/17/2023. Analysts have provided yearly estimates in a range of $3.80 being high and $3.52 being low. For TPR, this leads to a yearly average estimate of $3.65. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Tapestry Inc. surprised analysts by $0.03 when it reported $0.79 EPS against a consensus estimate of $0.76. The surprise factor in the prior quarter was $0.01. Based on analyst estimates, the high estimate for the next quarter is $1.45 and the low estimate is $1.24. The average estimate for the next quarter is thus $1.27.

Summary of Insider Activity:

Insiders traded TPR stock several times over the past three months with 1 Buys and 5 Sells. In these transactions, 2,130 shares were bought while 9,494 shares were sold. The number of buy transactions has increased to 22 while that of sell transactions has risen to 54 over the past year. The total number of shares bought during that period was 616,850 while 509,607 shares were sold.

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