Tapestry stock price target raised to $112 from $100 at Bernstein on Coach strength

Bernstein SocGen Group raised its price target for Tapestry Inc. to $112.00, maintaining an Outperform rating, citing strong fourth-quarter performance and the Coach brand's global outperformance despite a significant tariff headwind impacting future margins. While the firm adjusted its FY27 EPS estimates downward due to tariffs, it increased the earnings multiple based on continued quality and projected multi-year low double-digit growth. This bullish outlook contrasts with mixed analyst sentiment, as some firms like BofA Securities have lowered price targets due to tariff pressures, reflecting a balance between Tapestry's robust underlying fundamentals and ongoing external headwinds.

Analysis

Tapestry Inc. (TPR) presents a narrative of strong fundamental performance clashing with significant external headwinds, resulting in mixed analyst sentiment. The company surpassed Q4 2025 expectations with an EPS of $1.04 against a $1.00 forecast and revenue of $1.72 billion versus an anticipated $1.67 billion, contributing to a 47.76% year-to-date stock return. This operational strength is further evidenced by a robust gross profit margin of 75.44% and specific praise for the Coach brand's global outperformance. However, this positive momentum is challenged by a substantial tariff issue, which Bernstein quantifies as a 75 basis point impact on fiscal year 2026 margins and BofA Securities estimates could create a $0.60 headwind to future EPS. This has created a clear divergence in analyst outlooks: Bernstein and Morgan Stanley remain bullish, raising price targets to $112 and $115 respectively and increasing valuation multiples based on the belief that the market overreacted to a non-fundamental issue. Conversely, BofA and CFRA have adopted a more cautious stance with Neutral/Hold ratings, reflecting concern over the tangible impact of tariffs on future earnings, even as InvestingPro data suggests the stock is already trading above its fair value.

Key Decisions for Investors

• Investors should weigh Tapestry's proven operational execution and recent earnings beat against the quantifiable tariff headwind, which is expected to erode future EPS by as much as $0.60.
• The wide dispersion in analyst price targets, ranging from $96 to $115, signals a key debate over valuation; consider whether the company's fundamental quality justifies an expanded earnings multiple despite downward EPS revisions.
• Monitor future management commentary for strategies to mitigate the projected 75 basis point margin impact from tariffs, as any success in this area could serve as a significant positive catalyst.
• Given the stock's strong 47.76% year-to-date appreciation and some analysis suggesting it trades above fair value, a cautious approach may be warranted until there is greater clarity on the resolution of the tariff pressures.