CPRI: Profit Focus And Buybacks Will Support Balanced Risk Reward Outlook

Capri Holdings' analyst price target has been raised modestly from approximately $26.17 to about $26.54 per share, as analysts factor in updated Fashion Brands group estimates and potential shareholder value creation from initiatives such as the Michael Kors profitability recovery.

Analyst Commentary

Analysts remain divided on Capri Holdings, with some highlighting upside from execution on strategic initiatives and others signaling that valuation already reflects a fair degree of uncertainty.

Bullish Takeaways

• Bullish analysts see the higher price targets as reflecting clearer paths to shareholder value creation, particularly if recent operational initiatives are executed effectively.
• The focus on a Michael Kors profitability recovery is viewed as a key lever for margin expansion and earnings growth over the medium term.
• Expanded coverage with positive ratings suggests growing confidence that the company can stabilize its core brands and return to sustainable top line growth.
• Upside scenarios factor in incremental earnings from improved cost discipline and more efficient capital allocation, which could justify further multiple expansion.

Bearish Takeaways

• Bearish analysts maintain more cautious ratings, arguing that near term execution risks in the Fashion Brands portfolio limit the scope for aggressive valuation re rating.
• Moderate price target increases are interpreted as reflecting only incremental improvements in estimates, rather than a structural shift in the company growth outlook.
• Concerns persist that competitive pressures and brand fatigue could slow the pace of any Michael Kors turnaround, tempering earnings visibility.
• Some models assume that management must deliver consistently on margin and revenue targets before the stock can command a premium to peers, creating a higher bar for upside.

What's in the News

• The Board of Directors has authorized a new share buyback plan for Capri Holdings Limited, signaling continued commitment to shareholder returns (Key Developments).
• Capri Holdings has launched a three-year share repurchase program of up to $1.0 billion, which may provide support for earnings per share and the share price over time (Key Developments).
• The company has issued earnings guidance for the third quarter of 2026, projecting revenue of approximately $975 million to $1.0 billion and diluted EPS of $0.70 to $0.80 (Key Developments).
• Full-year 2026 guidance calls for revenue of approximately $3.375 billion to $3.45 billion and diluted EPS of $1.20 to $1.40, alongside operating income of about $100 million (Key Developments).

Valuation Changes

• The Fair Value Estimate has risen slightly from approximately $26.17 to about $26.54 per share, reflecting a modest upward revision in intrinsic valuation.
• The Discount Rate has fallen slightly from about 12.65 percent to roughly 12.04 percent, implying a marginally lower perceived risk profile or cost of capital.
• The Revenue Growth outlook remains effectively unchanged, holding near a mid single digit decline at approximately negative 5.39 percent.
• The Net Profit Margin forecast is essentially flat, staying close to 10.05 percent with only an immaterial adjustment in the updated model.
• The future P/E multiple has edged down marginally from about 12.27x to roughly 12.24x, signaling a slightly more conservative earnings multiple assumption.