Capri Holdings (CPRI) Valuation Check As Profitability Returns And 2026 Guidance Reshapes Expectations

Earnings rebound and fresh 2026 outlook

Capri Holdings (CPRI) returned to profitability in its latest quarter, reporting positive net income and higher earnings per share than a year earlier, while also issuing new full year 2026 revenue and earnings guidance.

See our latest analysis for Capri Holdings.

The earnings rebound and new 2026 guidance sit against a weaker recent share price trend. Capri Holdings’ 30-day share price return shows a decline of 17.79%, and its 1-year total shareholder return shows a decline of 9.08%, pointing to fading momentum despite the short-term lift.

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With Capri shares weaker over the past year, but the stock trading below some intrinsic and analyst estimates, you have to ask yourself: is this a reset that creates an opening, or is the market already pricing in future growth?

Most Popular Narrative: 45.7% Undervalued

Capri Holdings last closed at $20.42, while the most followed narrative from user n385903 points to a fair value of $37.64, creating a wide gap that this narrative tries to explain.

It has become more apparent that Capri’s turnaround story has to be done with no moat and rather tiny margins moving forward as it tries to move back to profitability. It can’t currently do buybacks and has to deal with more declining revenue. Projected inflation and a likely case of consumer burnout make the luxury space a significant risk. Their largest brand, Michael Kors, is undoubtedly experiencing a decline and will require crucial strategic understanding to reverse this trend. However, they have shown their brands to be inherently valuable and could sell them off in the future. These guys sell for way less than their revenue, and going back to a 10-12% margin, which is less than pre-Covid, would leave this company still significantly undervalued even if it has to cut high single-digit percentages off of its per annum revenue.

Read the complete narrative.

Curious how a turnaround, thinner margins and modest revenue assumptions can still point to such a big gap to $37.64? The core of this narrative is how future profitability, a specific margin profile and a chosen earnings multiple interact to justify that valuation. If you want to see exactly how those moving parts fit together, the full story is where the numbers really start to matter.

Result: Fair Value of $37.64 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this hinges on a successful turnaround at Michael Kors and on luxury spending holding up. Either of these factors could quickly weaken the $37.64 fair value case.

Find out about the key risks to this Capri Holdings narrative.

Build Your Own Capri Holdings Narrative

If you are not fully convinced by this argument, or simply want to test your own assumptions against the data, you can build a Capri view that reflects your outlook in just a few minutes, starting with Do it your way.

A great starting point for your Capri Holdings research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

Looking for more investment ideas?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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