Morgan Stanley raises Tapestry rating, labels it a scarce positive revision story

Investing.com -- Morgan Stanley upgraded Tapestry (NYSE:TPR) Inc. to Overweight from Equal-weight in a note Friday and raised its price target for the stock to $90 from $75. 

The bank pointed to stronger earnings momentum, improved brand performance, and resilience to tariffs as reasons for the rating change. 

Morgan Stanley (NYSE:MS) described Tapestry as a “scarce positive revision story” in the current retail landscape.

“We see room for positive revisions in the NTM [next twelve months], which should enable further valuation re-rating,” Morgan Stanley analysts wrote. 

The bank highlighted back-to-back quarters of double-digit growth in the Coach brand and expects continued topline gains, noting management’s guidance for 4% year-over-year sales growth in the upcoming quarter.

The analysts also pointed to Tapestry’s divestiture of the Stuart Weitzman brand as a key de-risking move. 

“TPR announced the sale of the Stuart Weitzman business in February – quelling our #4 rationale” for a previously cautious view tied to portfolio risk, Morgan Stanley noted.

With stronger gross margin forecasts—76.4% in 2026 versus the Street’s 75.6%—Morgan Stanley now models $5.65 in 2026 EPS, about 7% higher than consensus. 

The bank sees a path to even higher performance: “We see a path to ~22% margin&$5.80+ EPS as possible.”

Tapestry’s relative insulation from tariffs also makes it stand out. “TPR stood out in our prior work for tariff resilience,” analysts said, citing low China sourcing, a high international revenue mix, and pricing power.

While Morgan Stanley acknowledged that Tapestry is “already well-owned” and possibly near “peak fundamentals,” it views recent operational improvements as supportive of further upside.