As Tapestry Inc (NYSE:TPR) announced its earnings release on 29 September 2018, the consensus outlook from analysts appear highly confident, as a 53% rise in profits is expected in the upcoming year, relative to the past 5-year average growth rate of -17%. With trailing-twelve-month net income at current levels of US$398m, we should see this rise to US$607m in 2019. I will provide a brief commentary around the figures and analyst expectations in the near term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
How is Tapestry going to perform in the near future?
The view from 35 analysts over the next three years is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To get an idea of the overall earnings growth trend for TPR, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
By 2021, TPR’s earnings should reach US$756m, from current levels of US$398m, resulting in an annual growth rate of 11%. EPS reaches $3.43 in the final year of forecast compared to the current $1.39 EPS today. With a current profit margin of 6.8%, this movement will result in a margin of 11% by 2021.
Future outlook is only one aspect when you’re building an investment case for a stock. For Tapestry, I’ve compiled three key aspects you should further research:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Valuation: What is Tapestry worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Tapestry is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Tapestry? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.