- Raymond James analyst Rick B. Patel upgraded Capri Holdings Ltd CPRI to Strong Buy from Outperform at a price target of $60.
- The analyst believes the company has laid the groundwork for future EPS beats and can benefit from multiple expansions and upward revisions.
- Patel expects growth potential for CPRI, especially in the second half of FY24, as re-stocking inventory will likely lead to higher y/y sell-in into the wholesale channel.
- He expects retail to continue outperforming on favorable brand health and product affinity.
- The analyst has lowered the bar for FY24 results, following the Q3 earnings miss and below consensus guidance for FY24.
- For Q4 FY23, Patel expects a revenue decline of 15% Y/Y compared to the consensus estimate of -14% Y/Y and the company guidance of a decrease of 14.5% Y/Y to $1.275 billion.
- He expects EPS of $0.94 (vs consensus of $0.95 and guidance of $0.90-0.95), gross margin increase of 100 bps Y/Y to 64.7% (vs consensus of 64.9%) and operating margin of 8.5% (vs consensus of 8.6% and guidance of 8.5%) in Q4.
- For Q1 FY24, the analyst projects EPS of $1.45 (vs consensus of $1.43) and revenue of $1.28 billion (vs consensus of $1.31 billion).
- For FY24, he forecasts EPS of $6.09 (vs consensus of $6.12 and guidance of $6.40) and revenues of $5.75 billion (vs consensus of $5.77 billion and guidance of $5.8 billion).
- Price Action: CPRI shares are trading higher by 1.39% at $45.84 on the last check Thursday.
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