Capri Holdings Intrinsic Value – Argus Report Identifies Tapestry as Undervalued Opportunity Ahead of Capri Holdings Merger

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CAPRI HOLDINGS ($NYSE:CPRI), formerly known as Michael Kors Holdings, is a global fashion luxury group that owns several well-known brands including Michael Kors, Versace, and Jimmy Choo. The company has recently made headlines with its upcoming merger with Tapestry, the parent company of Coach and Kate Spade. This merger has caught the attention of market analysts, with Argus releasing a report identifying Tapestry as an undervalued opportunity ahead of the Capri Holdings merger. In its report, Argus highlighted the potential benefits that the Capri-Tapestry merger could bring to both companies. The combination of the two luxury groups is expected to create a stronger and more diversified entity, with a wider range of products and a larger global presence. This, in turn, is expected to lead to increased revenue and cost synergies, ultimately resulting in higher profitability for the merged company. Furthermore, Argus also pointed out that Tapestry’s current stock price does not accurately reflect the company’s true value. Despite facing some challenges in recent years, such as declining sales and a decrease in foot traffic in brick-and-mortar stores, Tapestry still has strong brand recognition and a loyal customer base.

With the added support and resources from Capri Holdings, the company is well-positioned to bounce back and potentially see a rise in its stock price. Another key point highlighted by Argus is the potential for cost savings that the merger could bring. By combining operations and streamlining processes, the merged company could potentially achieve significant cost reductions and improve overall efficiency. This would not only benefit the company’s bottom line but also make it more competitive in the luxury fashion market. The company’s undervalued stock price and potential for cost savings and revenue growth make it a promising prospect for investors. With the merger expected to be completed in the near future, now may be a good time for investors to consider adding Tapestry to their portfolios.

Stock Price

On Monday, CAPRI HOLDINGS stock opened at $38.25 and closed at $38.66, showing a modest increase of 1.15% from its previous closing price of $38.22. This comes as the market anticipates the upcoming merger between luxury fashion company Capri Holdings and global lifestyle brand Tapestry, which was recently identified as an undervalued opportunity by industry analysts at Argus Research. According to the Argus report, the merger between Capri Holdings and Tapestry has the potential to create significant value for investors. The report cites the strong financials of both companies and their complementary brands as key factors that could drive growth and profitability post-merger.

Additionally, the combined company would have a larger global footprint and diversified portfolio, providing a competitive edge in the highly competitive luxury fashion market. Furthermore, the report highlights the strong performance of Tapestry’s Coach brand, which has shown consistent growth in sales and profits over the years. This, coupled with Capri Holdings’ experience and success in revitalizing luxury brands such as Versace and Jimmy Choo, bodes well for the future of the merged company. Investors seem to be taking note of this potential, with CAPRI HOLDINGS stock seeing an uptick after the Argus report was released. This indicates that the market is recognizing the value and potential of the upcoming merger, further solidifying the argument that Tapestry is currently undervalued. In conclusion, the Argus report has shed light on the promising outlook for Capri Holdings and Tapestry following their merger. With a strong financial foundation, complementary brands, and potential for growth and profitability, this merger presents an attractive opportunity for investors. As the market continues to watch this development closely, it will be interesting to see how CAPRI HOLDINGS stock performs in the coming months leading up to the merger. Live Quote…

About the Company

Income Snapshot

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Cash Flow Snapshot

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Balance Sheet Snapshot

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Key Ratios Snapshot

Some of the financial key ratios for Capri Holdings are shown below. More…

Analysis – Capri Holdings Intrinsic Value

After conducting a thorough analysis of CAPRI HOLDINGS, I have determined that its fundamentals are strong. The company has a solid financial foundation, with a healthy balance sheet and positive cash flow. Its revenue and earnings have been consistently growing over the past few years, indicating a strong and stable business model. Based on our proprietary Valuation Line, we have calculated the fair value of CAPRI HOLDINGS to be approximately $57.8. This suggests that the current market price of $38.66 is undervalued by 33.1%. This presents an excellent buying opportunity for investors looking to add a quality stock to their portfolio. Furthermore, CAPRI HOLDINGS has a strong brand portfolio, with popular luxury fashion brands such as Michael Kors, Versace, and Jimmy Choo. These brands have a loyal customer base and a global presence, providing the company with a competitive advantage in the fashion industry. In addition to its financial strength and brand recognition, CAPRI HOLDINGS also has a solid management team in place, led by CEO John D. Idol. Under his leadership, the company has been able to successfully grow and expand its business, making smart investments and strategic acquisitions. Overall, I believe that CAPRI HOLDINGS is currently trading at a significant discount to its true value. With its strong fundamentals, established brands, and experienced management team, I am confident that the company has the potential for long-term growth and success. More…

Peers

The fashion industry is extremely competitive, with companies constantly vying for market share. Capri Holdings Ltd is no exception, and must compete against other major players such as Dazzle Fashion Co Ltd, PVH Corp, and Sub-Urban Brands Inc. In order to stay ahead of the competition, Capri Holdings Ltd must continually innovate and offer consumers unique and desirable products.

– Dazzle Fashion Co Ltd ($SHSE:603587)

Dazzle Fashion Co Ltd is a fashion company with a market cap of 6.76B as of 2022. The company has a Return on Equity of 11.66%. The company designs, manufactures, and markets women’s apparel and accessories. The company offers a wide range of products including dresses, tops, bottoms, outerwear, and swimwear. The company operates in two segments: wholesale and retail. The wholesale segment consists of sales to department stores, specialty stores, and e-commerce platforms. The retail segment consists of sales through the company’s own e-commerce platform and brick-and-mortar stores.

– PVH Corp ($NYSE:PVH)

PVH Corp is a publicly traded company with a market capitalization of 3.08 billion as of 2022. The company has a return on equity of 11.85%. PVH Corp is a holding company that operates through its subsidiaries. The company’s businesses include Calvin Klein and Tommy Hilfiger, which design, market, and distribute men’s, women’s, and children’s apparel; and Van Heusen, which designs and markets dress shirts, sportswear, neckwear, footwear, and other related products.

Summary

Argus analyst sees Tapestry as an undervalued play ahead of the planned Capri merger. Tapestry owns luxury brands such as Coach and Kate Spade, and Argus believes that their strong financials and growth potential make them an attractive investment opportunity. The upcoming merger with Capri Holdings, the owner of Michael Kors, is also seen as a positive for Tapestry’s stock price.

Additionally, Tapestry’s successful digital transformation and efforts to expand into the Chinese market are expected to drive future growth. Overall, Argus recommends investing in Tapestry due to its strong financials and potential for future growth.