Tapestry shares down after Barclays cuts to equal weight
There were deeper discounts at Kate Spade and Coach Outlet as Barclays analysts surveyed promotions over the holidays in the handbag category. Seeing the trend as a warning sign for weaker demand ahead, the firm downgraded shares of the brands’ parent, Tapestry, to equal weight from overweight on Monday.
Inflation has persisted so long that even upper income households are feeling the pinch, according to Barclays. Tapestry’s target demo is a household making $125,000 to $150,000 a year. Barclays’ consumer research has shown that this income bracket reduced holiday spending by about 14% at the end of last year.
Rival Capri could feel similiar pressure at its Michael Kors brand, Barclays said. However, the firm reiterated the stock at overweight, saying it could still benefit as global tourism reopens, especially at its Versace and Jimmy Choo brands. Also, promotions during the holidays were flat at Michael Kors.
Deep discounts at Kate Spade could weigh on Tapestry shares
Barclays raised price targets on both stocks, citing the possibility for multiple expansion. Tapestry’s price target was increased $43, which is about in-line with where the stock is currently trading. Capri’s target goes to $72, or nearly 14% above its Friday close.
—Christina Cheddar Berk
Cowen upgrades Skechers, says footwear brand has hidden upside potential
Cowen upgraded Skechers to outperform from market perform, noting Wall Street could be…
