BMO analyst Simeon Siegel upgraded Capri stock to outperform, citing the company's undervalued base and potential for improvement. Siegel believes the market has been too negative on Capri, which has seen its stock price decline significantly in recent years. He points to the company's potential for growth through its brands and believes that investor focus will lead to a turnaround.
Dramatic Looks Were Trending at Golden Globes 2025: Ali Wong in Balenciaga, Melissa McCarthy in Christian Siriano and More DressesWall Street can give that impression that it’s all about numbers — margin multiples, revenue growth, PE ratios and all the other metrics that add up to a stock price.
— which struggled as it waited at the altar for the Tapestry Inc. buyout and then saw its stock price collapse along with the deal — sentiment has ranged from bad to very bad. Shares of Capri increased 7.6 percent to $21.83 on Monday after BMO analyst Simeon Siegel upgraded the stock to outperform with a target price of $31. That gave the company a market capitalization of $2.6 billion. An outperform rating means that an analyst thinks a company is stronger than the market is giving it credit for. And Siegel said the Capri bears have gone too far and are too “negative” or “uninterested” on the stock, which has fallen about 60 percent over the past years while the S&P 500 rose 24.7 percent. While upgrades are most often based on some sign of better performance at the company, Siegel’s is based more on vibes and the underappreciated base Capri is working from as it builds back from a tough stretch as it waited for the Capri deal, at $57 a share. “Capri deserves management and investor focus,” Siegel said. “It’s regained the former; the latter should follow.” Even though the turnaround at Michael Kors, the company’s largest brand, will take time, Siegel said Capri has multiple ways to start turning sentiment and its stock price around. “While we don’t see clear signs of strength/inflection — yet — we see potential upside as sales, margins and debt pressures turn ‘less-bad,’” Siegel wrote in his research note.But that’s a decline with some peculiarities. “Unlike most large brand oversaturation issues — something Michael Kors knows well — Capri’s recent revenue drop appears more a function of distraction/lack of effort post-transaction announcement than of an overstretched logo,” Siegel said. “To wit, inventory is ; typically, overstretched brands first need to address inventory gluts. Metaphorically — maybe literally too? — turning the lights back on should prove a powerful opportunity.” But Siegel argued that the shortest path to upside for the stock is a reduction in the company’s debt load as net debt is high at about 62 percent of the companies’ market cap, equivalent to $12 to $13 a share. Net debt stood at $1.5 billion at the end of the second quarter in September and is on track to be about $1.2 billion by the end of the fiscal year. “Whether via asset sales or cash flow from business improvement, shrinking the market cap-to-enterprise value gap could represent meaningful and underappreciated upside to shares,” Siegal said. Siegel estimated that even if Michael Kors continued to decline next year with sales dropping to $3 billion, that should still produce earnings before interest, taxes, depreciation and amortization of $500 million to $550 million. With that math — if Michael Kors were valued at 6-times EBITDA, or about $2.5 billion — Capri shareholders have been valuing Versace and Jimmy Choo at about $740 million combined. Selling the luxury brands could help Capri pay down debt and speed along Michael Kors, while shareholders, under Siegel’s reasoning, see a nice bump up.JD Vance's Wife Usha Wears Snake Dress by Retrofête for Mar-a-Lago New Year's Eve Party. We use vendors that may also process your information to help provide our services. // This site is protected by reCAPTCHA Enterprise and the Google. We use vendors that may also process your information to help provide our services. // This site is protected by reCAPTCHA Enterprise and the GoogleWWD and Women's Wear Daily are part of Penske Media Corporation. © 2025 Fairchild Publishing, LLC. All Rights Reserved.
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