Why Tapestry (TPR) is a top value stock in the long term

For new and old investors, making the most of the stock market opportunities and maintaining confidence in their investments are common goals.

Achieving these goals is made easier by the Zacks Style Scores, a unique set of guidelines that rate stocks based on popular investment methodologies, namely value, growth and momentum. The Style Scores can help you narrow down which stocks are better for your portfolio and which can beat the market over the long term.

Why investors should pay attention to this value stock

Unlike growth or momentum investors, value investors are concerned with finding good stocks at good prices and figuring out which companies are trading below their true value before the broader market notices. The Value Style Score uses metrics such as P/E, PEG, price-to-sales and price-to-cash flow to select the most attractive and cheapest stocks.

Tapestry (TPR)

Tapestry, Inc., formerly known as Coach, Inc., was founded in 1941 and is headquartered in New York. The company designs and markets fine accessories and gifts for women and men in the United States and internationally. The company offers lifestyle products, including handbags, women’s and men’s accessories, shoes, jewelry, seasonal apparel collections, sunglasses, travel bags, fragrance and watches. Tapestry now operates in three segments, including the Coach brands (North America and International – 73.6% of fiscal 2022 revenue), Kate Spade & Company (21.6% of fiscal 2021 revenue) and Stuart Weitzman (4.8% of fiscal 2022 revenue).

TPR has a Zacks Rank of 3 (Hold), a Value Style Score of A and a VGM Score of A. Compared to the Retail (Apparel & Footwear) industry’s P/E ratio of 12.8, Tapestry shares are trading at a P/E ratio of 11.6. TPR also has a PEG ratio of 0.9, a price-to-cash-flow ratio of 9.6 and a price-to-sales ratio of 1.5.

Value investors don’t just look at a company’s valuation metrics; positive earnings also play a crucial role. Eight analysts have upgraded their earnings estimates for fiscal year 2023 in the past 60 days. The Zacks Consensus Estimate has increased by $0.09 to $3.72 per share. TPR has an average earnings surprise of 10.6%.

TPR should be on investors’ shortlist due to its impressive earnings and valuation fundamentals, a good Zacks Rank, and strong Value and VGM Style Scores.

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