Capri Holdings Shares Rise After It Lifted Fiscal 2022 Guidance; Target Price $67

Capri Holdings shares rose over 3% on Tuesday after the multinational fashion holding company lifted its fiscal 2022 prediction for profit and revenue, primarily driven by better-than-anticipated fiscal first-quarter sales trends.

The global fashion luxury group, Michael Kors parent Capri expects fiscal 2022 revenue to about $5.15 billion, up from the previous guidance of nearly $5.10 billion. As a result of the better than expected first-quarter outlook, the company now expects fiscal 2022 adjusted earnings per share to be in the range of $3.80 and $3.90 as compared to prior guidance of $3.70 to $3.80.

Following this, Capri Holdings shares rose over 3% to $56.485 on Tuesday. The stock surged more than 34% so far this year.

Executive Comments

“As the world reopens, we are pleased to be seeing better than expected performance from all three of our iconic fashion luxury houses and are raising our outlook for the year. With greater visibility into the path of the global economic recovery, we now have even more confidence in the future and believe our three luxury houses position Capri Holdings to deliver multiple years of strong revenue and earnings growth,” said John D. Idol, the Company’s Chairman and Chief Executive Officer.

Capri Holdings Stock Price Forecast

Fourteen analysts who offered stock ratings for Capri Holdings in the last three months forecast the average price in 12 months of $67.33 with a high forecast of $82.00 and a low forecast of $54.00.

The average price target represents 19.53% from the last price of $56.33. Of those 14 analysts, 10 rated “Buy”, four rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the stock price forecast of $64 with a high of $90 under a bull scenario and $26 under the worst-case scenario. The firm gave an “Overweight” rating on the multinational fashion holding company’s stock.

Several other analysts have also updated their stock outlook. Cowen and company raised the target price to $57 from $40. CFRA lifted the rating to hold from sell and upped the target price to $55. UBS raised the price target to $82 from $75. Guggenheim lifted the price target to $62 from $55. Credit Suisse upped the target price to $56 from $48.

Analyst Comments

“Global retail sales improvement in calendar 2H20 improves visibility on the luxury accessories trajectory post-Covid-19: 1) Retail fleet optimization supports a return to at least a 20%+ Michael Kors brand EBIT margin medium term; 2) Accessories progress underpins our +10% 5-year revenue CAGR and 18% FY23 operating margin forecast at Versace; and 3) Our Base Case contemplates Nov-23 term loan paydown. Valuation remains attractive at 12x FY23e EPS,” noted Kimberly Greenberger, equity analyst at Morgan Stanley.