Raymond James raises Tapestry stock price target to $115 on growth potential

Raymond James raised its price target on Tapestry Inc. (TPR) to $115 from $85, maintaining an Outperform rating, driven by strong topline growth levers, successful premiumization of the Coach brand, and anticipated margin expansion that led to increased FY2026 EPS and revenue forecasts. The firm's revised outlook reflects Tapestry entering a "new gear of stronger growth," primarily led by Coach, with strategic optionality for Kate Spade, despite the stock currently trading above its indicated fair value at a 27.5x P/E.

Analysis

Tapestry Inc. (TPR) has received a significant endorsement from Raymond James, which raised its price target to $115 from $85 while reiterating an Outperform rating, signaling strong confidence in the company's growth trajectory. This optimism is anchored in the sustained momentum of the Coach brand, whose successful premiumization is evidenced by reduced year-over-year promotional activity and strong consumer appeal. The company's fundamentals appear robust, with gross profit margins at 75.09% and revenue growth of 2.67% over the last twelve months. Raymond James projects above-consensus revenue growth of 3% for fiscal year 2026, driven by an anticipated 5% growth at Coach, and has raised its EPS estimate to $5.34. This positive outlook is echoed by other firms like Citi, BMO, and Morgan Stanley, which have also recently increased their price targets. However, this bullish thesis is set against a challenging valuation backdrop. The stock currently trades at a 27.5x P/E ratio, and the new Raymond James target implies a 21.5x P/E on FY2026 estimates—a substantial premium to the stock's 10x five-year average. This premium is justified by the firm's view that Tapestry has entered a "new gear of stronger growth," though the underperformance of the Kate Spade brand remains a point of concern, albeit one with strategic optionality through a potential turnaround or sale.

Key Decisions for Investors

• Given the strong operational momentum at the Coach brand and multiple positive analyst revisions, investors may view the stock's premium valuation as justified by a new, higher growth trajectory.
• Investors should critically assess the stock's elevated 27.5x P/E ratio, which is noted as being above fair value and significantly higher than its historical average, weighing the positive outlook against the risk of multiple contraction if growth falters.
• It is critical to monitor future earnings reports for progress on the Kate Spade brand, as a successful turnaround or a potential sale represents a key source of strategic optionality that could materially impact consolidated results.
• Consider the consensus of positive analyst ratings as a strong signal, but verify if upcoming quarterly performance, particularly the mid-single-digit revenue growth expected for Q4, validates the current market optimism before initiating or adding to a position.