Capri Holdings Ltd Stock Forecast:
According to the stock forecasts from 9 analysts, the average target price for Capri Holdings Ltd is estimated to be USD 65.79 within the next 12 months. The average analyst rating for the company is considered a “Strong Buy.” Stock Target Advisor‘s analysis of the company is “Slightly Bullish,” based on 6 positive indicators and 4 negative indicators. Currently, Capri Holdings Ltd’s stock price is USD 50.71, but it has declined by 25.84% in the past week, 17.41% in the past month, and 25.78% over the past year.
Analysts Coverage Change:
- Morgan Stanley & Co assumes an Overweight rating on Capri Holdings Ltd. and lowers the price target to $55 from $ 58.
- Robert W. Baird & Co maintains an Outperform rating and lowers the price target to $68 from $70.
- Raymond James maintains an Outperform rating and lowers the price target to $60 from $78.
- Telsey Advisory Group maintains a Market Perform rating and lowers the price target to $55 from $70.
- BMO Capital Markets maintains an Outperform rating and lowers the price target to $70 from $74.
- Citigroup maintains a Buy rating and lowers the price target to $63 from $75.
- UBS maintains a Buy rating and lowers the price target to $68 from $75.
Capri Holdings Ltd. News:
Capri Holdings experienced a 23% drop on Wednesday after the company failed to meet earnings expectations and reduced its annual profit forecast.
The company reported lower-than-expected earnings per share of $1.84 instead of the expected $2.22, according to estimates. Revenue was also below expectations at $1.51 billion instead of $1.53 billion. The company saw a 6% decline in revenue compared to the previous year, with net income of $225 million, down from $322 million in the previous year.
Each of the company’s luxury brands saw a decrease in revenue, including Michael Kors which fell 7.2%, Jimmy Choo which fell 5.6%, and Versace which fell 0.8%. The decline in revenue in each division was due to slower store traffic in Asia following China’s easing of its zero-Covid policy. Capri reported a 21% increase in net inventory to $1.19 billion as of December 31st, which was an improvement from the previous quarter, and the company expects inventory levels to decline by the end of the current quarter.
Positive Fundamentals:
Capri Holdings Inc. is a stock with several attractive attributes that make it a potentially good investment opportunity. One of the key features of the company is its high market capitalization, which places it among the largest entities in its sector and in the top quartile of companies in terms of stability.
Another attractive aspect of the stock is that it is underpriced compared to earnings when compared to its peers. The stock is trading at a low price-to-earnings ratio, which means it may be a good value opportunity. However, it is important to assess the financial performance of the company to ensure there is no underlying reason for the undervaluation.
The company’s management has also delivered superior return on equity and better return on invested capital in the most recent four quarters, placing it in the top quartile among its peers. Additionally, Capri Holdings Inc. has had positive total cash flow and positive total free cash flow in the most recent four quarters, indicating financial stability and strong cash management.
In conclusion, Capri Holdings Inc. is a stock with strong financials, a high market capitalization, and potential for growth, making it a compelling investment opportunity for those who are interested in its sector.
Negative Fundamentals:
Capri Holdings Ltd. (formerly known as Michael Kors Holdings Ltd.) is a luxury fashion holding company that operates several iconic fashion brands, including Michael Kors, Jimmy Choo, and Versace. Despite its strong brand portfolio, the stock of Capri Holdings Ltd. is not considered a favorable investment option by some market analysts due to its high valuation compared to its earnings, book value, cash flow, and free cash flow.
The stock is trading at a premium compared to its peers, based on different financial metrics, such as price-to-earnings (P/E) ratio, price-to-book (P/B) ratio, price-to-cash flow (P/CF) ratio, and price-to-free cash flow (P/FCF) ratio. In each of these cases, the stock is priced higher than the median of its sector, which is a cause for concern among investors.
In conclusion, the high valuation of Capri Holdings Ltd. stock might not be justified by its underlying financial performance, and as a result, some investors might proceed with caution before making an investment decision. It’s essential to consider all relevant factors, including the company’s financials, competitive landscape, and industry trends before making any investment decisions.
FA Score (Fundamental Analysis):
The fundamental analysis of Capri Holdings Ltd. is “Slightly Bullish” with a FA score of 6 out of 10, where 0 is very bearish and 10 is very bullish.
