Tapestry rated Buy as Coach's growth offsets Kate Spade's weakness, with strong international expansion and buybacks.

Tapestry's stock is rated Buy following a sharp sell-off after its earnings report, driven by strong performance from Coach, which is fueling high-margin growth and international expansion. Coach's pricing power, success in attracting Gen Z customers, and operational efficiency support expectations of double-digit earnings growth and strong free cash flow by fiscal year 2027. Growth in international markets like Greater China and Europe is expected to offset slower growth in North America, helping Tapestry meet consolidated revenue targets. The company's valuation is attractive at 16.4 times earnings, supported by $1.35 billion in share buybacks and a higher dividend, projecting a total return above 20% without needing a turnaround from Kate Spade.