- Bank of America Securities downgraded Tapestry Inc. (NYSE:TPR) from a “Buy” to a “Neutral” rating despite raising the price target from $95 to $115.
- The stock’s valuation concerns arise after a 66% year-to-date surge, with a forward P/E ratio of about 20x, significantly above its 10-year average of 13x.
- Analyst Lorraine Hutchinson forecasts a strong fourth quarter for Tapestry, with an expected EPS of 98 cents, a 5.4% sales growth, and a 16.4% operating margin.
Tapestry Inc. (NYSE:TPR), the parent company of the well-known Coach brand, has recently faced a downgrade from Bank of America Securities. The downgrade from a “Buy” to a “Neutral” rating was issued on July 29, 2025, when the stock was priced at $107.40. This decision reflects concerns about the stock’s valuation after a significant rally this year.
Despite the downgrade, Bank of America Securities analyst Lorraine Hutchinson raised the price target for Tapestry from $95 to $115. This adjustment indicates confidence in the company’s potential, even as the stock has surged 66% year-to-date, outpacing the S&P’s 9% increase. The stock’s current valuation is near the top of its historical range, with a forward P/E ratio of about 20x, compared to its 10-year average of 13x.
Hutchinson’s analysis highlights the strong performance of the Coach brand, which is expected to maintain robust growth in the coming quarters. She forecasts a strong fourth quarter for Tapestry, with an expected EPS of 98 cents, aligning with management’s guidance. Additionally, she anticipates a 5.4% sales growth and a 16.4% operating margin, suggesting a positive outlook for the company’s financial performance.
The downgrade has led to a 2.4% decline in Tapestry’s stock price, which is currently trading between $105.75 and $108.30. The company’s market capitalization is approximately $22.31 billion, with a trading volume of 5,417,855 shares on the NYSE. Despite the recent dip, Tapestry’s stock remains near its 52-week high of $110.44, indicating investor interest and confidence in the company’s future prospects.
