TPR vs. PPRUY: Which Stock Should Value Investors Buy Now?

·2 min read

Investors with an interest in Retail - Apparel and Shoes stocks have likely encountered both Tapestry (TPR) and Kering SA (PPRUY). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Tapestry has a Zacks Rank of #2 (Buy), while Kering SA has a Zacks Rank of #4 (Sell) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that TPR has an improving earnings outlook. But this is just one factor that value investors are interested in.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

TPR currently has a forward P/E ratio of 11.11, while PPRUY has a forward P/E of 17.28. We also note that TPR has a PEG ratio of 0.89. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. PPRUY currently has a PEG ratio of 2.37.

Another notable valuation metric for TPR is its P/B ratio of 4.22. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, PPRUY has a P/B of 5.08.

Based on these metrics and many more, TPR holds a Value grade of A, while PPRUY has a Value grade of D.

TPR has seen stronger estimate revision activity and sports more attractive valuation metrics than PPRUY, so it seems like value investors will conclude that TPR is the superior option right now.

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