Tapestry is trading at an attractive level after its fiscal third-quarter earnings report added to investor concerns around demand for affordable luxury fashion, making now a good time to buy shares of the Coach owner, according to JPMorgan. The investment bank has an overweight rating on Tapestry, which also owns Kate Spade New York, and raised its price target on the stock to $200 from $190, implying more than 50% upside from Thursday's close. "Buy the dip," analyst Matthew Boss said Friday in a note to clients. "We see TPR's bottom-line growth accelerating with opportunities across the top line, gross margin, [selling, general and administrative], and capital allocation driving a return to double-digit compounding [total shareholder return], by our model." Tapestry issued weak guidance to investors while releasing its latest financials on Thursday, driving down its stock by more than 12%. The outlook for revenue growth in the June quarter, in particular, underwhelmed investors who are concerned about headwinds facing affordable luxury brands. JPMorgan is more sanguine, however, saying Coach has undergone a brand revival over the past few years, enabling it to gain traction with Gen-Z shoppers and bolster its balance sheet. Coach led revenue gains for Tapestry in the third quarter, outperforming other brands in its portfolio such as Spade and Stuart Weitzman, per the investment bank. JPMorgan's call matches the Wall Street consensus, where 15 of 24 analysts covering Tapestry have either a buy or strong buy rating on the stock, LSEG data shows. Tapestry shares are down over the past one- and three months, but higher by more than 32% over the past six months.
