Tapestry long-term investment case favored at Bernstein, with ‘China demand surging’

Bernstein analysts upgraded shares of Tapestry (NYSE:) to Outperform from Market Perform, as well as raised the firm’s price target on the stock to $55 from $50 per share in a note to clients Monday.

The analysts told investors that they like the long-term investment case for Tapestry and believe the previous weakness they forecasted has now played out.

“We like Tapestry as a long-term compounder with a strong brand, category and channel mix at an attractive price,” they said.

“The Coach brand (75% of sales, 90% of brand EBIT) has 30+% margins, 90% channel control (

They said the firm’s near-term concerns about PR are dissipating, with China demand also surging.

“China is poised to grow +50% in Q4 on reopening handbag demand,” the analysts wrote.

“We raise FY24 numbers and expect multiple expansion to follow. Strong China / Asia rebound will drive growth in FY24 despite flat/declining N.Am demand, and good promo discipline & channel control will protect margins.”