Capri Holdings (NYSE:CPRI) stock rose 7% Wednesday morning after JPMorgan upgraded the luxury fashion group to Overweight from Neutral, setting a $30 price target that implies over 50% upside from Tuesday’s closing price of $19.62.
JPMorgan analyst Matthew Boss sees Capri on a path of multi-year sequential revenue, gross, and operating margin improvement, led by a brand reinvigoration strategy at the Michael Kors brand.
The upgrade comes as Capri implements a turnaround strategy focused on product improvement, including a 25% SKU rationalization by Spring that will enable a sharpened focus on three core product franchises: Hamilton, Laila, and Nolita.
Boss’s fiscal 2028 earnings estimate of $2.71 per share stands over 25% above current consensus, based on 2.4% annual revenue growth in fiscal years 2027-2028 and 8.1% operating margins. This is compared to management’s target of low-to-mid-single-digit growth and low-double-digit consolidated margins by fiscal 2028.
The analyst identified four areas of incremental upside potential: improved full-price selling through markdown recapture, tariff mitigation, capital allocation following the closure of the Versace transaction, and distribution optimization including a 25% reduction in Michael Kors retail stores relative to 2019 levels.
Capri’s strategy mirrors successful turnarounds at other global brands like Ralph Lauren, Tapestry, and Levi Strauss, according to JPMorgan’s analysis.
"...management is focused on driving product improvement, a sharpened value proposition, enhanced marketing, and distribution optimization, which we see translating to sequentially improved revenues in 2H26 and inflection to FY27 revenue growth at the Michael Kors brand and the total company," wrote Boss.
Source :
https://www.investing.com/news/stock-market-news/jpmorgan-see-50-upside-inmichael-kors-owner-capri-4188213
