Shares of Tapestry Inc (NYSE: TPR) soared 6% higher on Monday after analysts at Goldman Sachs Group upgraded the stock rating from “neutral” to a “buy”.
Moreover, Goldman raised the Tapestry share price target from $16 to $18. This would indicate a potential upside of 33.6% compared to the closing price on Friday.
Goldman upgraded the stock after the company said it expects its fiscal fourth-quarter results to come ahead of internal expectations. Profits are expected to be boosted by slashing promotion costs. with inventory levels falling from a year earlier and the retailer using fewer promotions, helping gross margins.
Shares of the luxury accessories retailer traded in a volatile fashion after Jide Zeitlin resigned as the chairman and CEO of Tapestry. It was later announced that Tapestry opened a probe into his personal behavior.
“Mr. Zeitlin’s departure was not due to any disagreement with the Company on any matter relating to the Company’s operations, financial statements or accounting,” the company said in a regulatory filing.
Tapestry, which owns Kate Spade and Coach brands, appointed the current Chief Financial Officer Joanne Crevoiserat as an interim CEO. The luxury retailer expects to report earnings on Aug. 13.
Tapestry share price opened around 6% higher before paring back a portion of gains to trade around 3% up on the day.