Top 10 Luxury Stocks According to Analysts

7. Capri Holdings Limited (NYSE:CPRI)

Average Price Target Upside as of August 5: 31.6%

Number of Hedge Fund Holders: 55

Capri Holdings Limited (NYSE:CPRI) is a multinational fashion holding company that owns several luxury brands, including Michael Kors, Versace, and Jimmy Choo. In August 2023, Tapestry, Inc. (NYSE:TPR), known for its brands like Coach New York and Kate Spade, agreed to acquire Capri Holdings (NYSE:CPRI) for $8.5 billion ($57 per share).

However, this acquisition faces regulatory scrutiny, with concerns raised by the U.S. Federal Trade Commission (FTC) regarding potential reductions in market competition and impacts on labor conditions. The outcome of this acquisition is anticipated to shape Capri’s (NYSE:CPRI) future trajectory as it seeks to expand its global footprint and maintain its competitive edge in the luxury fashion industry.

While the regulatory issues remain a concern for Capri (NYSE:CPRI), some analysts and experts are optimistic about its future regardless of the outcome. On June 25, Wells Fargo upgraded Capri (NYSE:CPRI) to Overweight from Equal Weight with a price target of $43. The firm thinks that the company’s stock price is too low compared to its real value. The stock is trading much lower than the $57 per share that Tapestry (NYSE:TPR) is offering.

Wells Fargo thinks there are three possible outcomes. The first one is that Tapestry (NYSE:TPR) wins a legal battle with the FTC, and Capri (NYSE:CPRI) shareholders get $57 per share. The second scenario is that if the deal falls through, the company might sell off its brands like Versace and Jimmy Choo and just keep Michael Kors.

The third is that Capri (NYSE:CPRI) could sell all its assets and not be bought by Tapestry. In all these cases, Wells Fargo believes the company’s stock has a lot of potential to increase in value.

In Q1, 55 hedge funds had stakes worth $1.05 billion in Capri Holdings (NYSE:CPRI). Pentwater Capital Management is the most significant shareholder of the company with 3.85 million shares worth $143.148 million.