Tapestry Stock Ticks Higher on Analyst Upgrade

The stock hasn't recovered as well as its peers

Deputy Editor
Sep 16, 2020 at 9:07 AM
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Tapestry Inc (NYSE:TPR) received an upgrade to "buy" from "hold" at Deutsche Bank this morning, with an added price-target hike to $21 from $18. The firm cited the luxury company's efforts to heighten its omnichannel strategy, which will allow for margin expansion in the coming fiscal years. The analyst also noted that the Kate Spade parent hasn't yet staged the same recovery as many of its sector peers. At last check, the stock is up 4.7% at $17.64.

On the charts, TPR is contending with pressure at the 180-day moving average, a trendline it hasn't closed above since late February. Now nearing the $18 region, which has rejected the stock's rallies since its March lows, the equity is down around 35% year-to-date. Coming into today, seven analysts carry a "strong buy" on Tapestry stock, leaving plenty of room for upgrades, as the remaining 13 in coverage sport a tepid "hold" rating.

In the options pits, calls have been traded nearly seven times as much as puts in the last couple weeks. This is per Tapestry stock's 10-day call/put volume ratio of 6.92 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio stands in the 69th percentile of its annual range, meaning this preference for calls is stronger than usual. 

Options look like a decent way to go when weighing in on TPR. The stock's Schaeffer's Volatility Index (SVI) of 55% sits higher than 15% of readings in its annual range, suggesting short-term options are pricing in relatively low volatility expectations. In other words, the stock's near-term options are attractively priced at the moment.


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