Core Viewpoint - Tapestry, Inc. stock has declined as analysts reassess its valuation despite the ongoing strength of the Coach brand, leading to a downgrade from Buy to Hold by Bank of America Securities analyst Lorraine Hutchinson, while raising the price forecast from $95 to $115 [1][2]. Group 1: Financial Performance and Projections - Tapestry has traded at an average P/E of 13x over the past decade, currently sitting at the upper end of the range, which has influenced the downgrade to a Neutral stance [2]. - Hutchinson forecasts a solid fourth quarter with EPS of 98 cents, matching management's guidance, alongside expected sales growth of 5.4% and an operating margin of 16.4% [3]. - Fiscal year 2026 guidance will be closely monitored, with expectations for mid-single-digit sales growth and stable margins, balancing tariff-related pressures with SG&A efficiency [3]. Group 2: Brand Performance and Market Dynamics - The Coach brand continues to perform well due to effective marketing and premium product appeal, although management is not expected to forecast double-digit growth for the brand this year [4]. - There is potential for upside in fiscal year 2026 estimates, but limited long-term margin expansion is anticipated beyond Coach's current operating margin of 33.6% [4]. Group 3: Tariff Impact and Profitability - Management is expected to maintain profitability over time despite tariff pressures, with a projected 60 basis points decline in gross margin for fiscal year 2026 due to tariffs, with full recovery anticipated by fiscal year 2027 [5].