Capri shares climb after JPMorgan upgrades the luxury fashion house

Capri Holdings shares leapt 10% Wednesday after JPMorgan analysts upgraded their rating for the luxury fashion group. Analysts raised their rating on the Michael Kors and Jimmy Choo parent to “overweight” (buy) from “neutral,” setting a $30 price target — 40% above current trading levels.

Last year, Tapestry agreed to buy Capri for $8.5 billion, but the deal hit a snag after the Federal Trade Commission sued in April, arguing the merger would hurt competition in the “accessible luxury” market. JPMorgan analysts think Capri’s best days are ahead, predicting steady growth over the next few years. The push comes largely from a revamp of the company’s Michael Kors label by rolling out fresher designs, selling more items at full price, and cutting back on discounts. 

Analysts cited multiple levers of growth for the company, including plans to raise prices to offset tariffs and the deal it struck to sell its underperforming Versace label. Plus, Michael Kors now has 25% fewer stores than in 2019, a move analysts say should make the brand feel more exclusive and profitable.

Capri shares are now positive on the year, up 3% year to date.