Wells Fargo sees buying opportunity in Tapestry shares after sell-off

Shares of Tapestry, the parent company of Coach, dropped nearly 16% on Thursday following the company’s warning that tariffs introduced by former US President Donald Trump would negatively impact profits.

The sell-off came despite a strong year-to-date performance, with the stock up more than 46% in 2025 before the latest decline.

Wells Fargo maintained its overweight rating on Tapestry and raised its price target from $100 to $120 per share, implying more than 25% upside from Thursday’s closing price of $95.69.

Analyst Ike Boruchow described the pullback as a buying opportunity, noting that the near-term topline trajectory remains strong and is in fact accelerating.

“While today’s sell-off is due to a ‘weak’ FY26 outlook, we focus much more on the [near-term] topline trajectory – which continues to beat and is actually accelerating,” Boruchow wrote.

“We see Coach continuing to demonstrate upward momentum, while AUR [average unit retail] dynamics appear intact.”

Potential shareholder returns and growth prospects

Boruchow also highlighted the company’s strengthened financial position following the court’s decision to block its proposed acquisition of Capri Holdings (CPRI).

With the deal off the table, Tapestry now holds what he described as a “war chest” of cash, which could be deployed for share buybacks.

According to the analyst, this option could significantly enhance shareholder returns and add to the company’s earnings accretion potential.

The market’s reaction to the earnings guidance was notably sharp, given the company’s broader performance trends.

Wells Fargo’s revised price target suggests confidence in the business’s underlying momentum, particularly in its flagship Coach brand, which has been posting solid sales growth.

Broader analyst consensus remains positive

Other analysts on Wall Street echoed Wells Fargo’s sentiment. Barclays also advised clients to take advantage of the pullback, recommending that investors buy on the dip.

Morgan Stanley acknowledged that expectations were high going into Tapestry’s fiscal fourth-quarter results, given the stock’s strong year-to-date run, but maintained a constructive outlook.

Data from LSEG shows that the majority of analysts remain positive on Tapestry’s prospects.

Of the 21 analysts covering the stock, 15 rate it either a “buy” or “strong buy”, indicating continued confidence in the company’s growth trajectory and brand positioning despite near-term profit headwinds from tariffs.

Tapestry’s performance in 2025 has reflected resilience in the face of competitive pressures in the luxury and premium fashion segment.

In its fourth quarter results, the company’s Kate Spade’s sales declined 13% in the fiscal fourth quarter to $252.6 million.

Coach posted a 14% increase in sales to $1.43 billion, contributing to companywide revenue surpassing forecasts.

For the current fiscal year, Tapestry projects revenue to reach close to $7.2 billion, marginally above analysts’ estimates of $7.12 billion.

Earnings per share are expected to range between $5.30 and $5.45, just below the Wall Street consensus of $5.49.

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