• Citigroup recently reinstated coverage of Capri Holdings with a Buy rating, highlighting improved financial stability following the sale of Versace and renewed confidence in the business.
• The bank’s commentary pointed to the Michael Kors label’s ability to generate cash as a key pillar of Capri’s strengthened position.
• Next, we’ll examine how Citi’s renewed confidence, particularly around Capri’s enhanced balance sheet, could reshape the company’s existing investment narrative.

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Capri Holdings Investment Narrative Recap

To own Capri Holdings today, you need to believe the company can stabilize its core Michael Kors and Jimmy Choo brands while repairing profitability after a period of revenue softness and losses. Citi’s reinstated Buy rating following the Versace sale speaks to a cleaner balance sheet, but it does not remove the near term risk that ongoing revenue declines and brand fatigue could keep margins under pressure.

The recently announced US$1,000 million share buyback authorization is especially relevant in light of Citi’s comments, because it underscores how Capri is choosing to use its improved financial flexibility. For investors focused on catalysts, that capital return plan sits alongside management’s guidance for modest operating income in FY 2026, which keeps the spotlight on whether cash generation from Michael Kors can consistently fund both reinvestment and buybacks.

Yet beneath Citi’s renewed optimism, investors should be aware of Capri’s continued exposure to weakening demand and brand fatigue risks...

Capri Holdings' narrative projects $3.7 billion revenue and $351.8 million earnings by 2028.

Uncover how Capri Holdings' forecasts yield a $26.54 fair value, a 3% upside to its current price.

Exploring Other Perspectives

Four fair value estimates from the Simply Wall St Community range from US$26.54 to US$63.01 per share, highlighting very different expectations. Set against Citi’s focus on balance sheet repair, these varying views invite you to weigh how ongoing revenue softness could shape Capri’s ability to rebuild earnings over time.

Explore 4 other fair value estimates on Capri Holdings - why the stock might be worth over 2x more than the current price!

Build Your Own Capri Holdings Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• 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.
• Our free Capri Holdings research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Capri Holdings' overall financial health at a glance.

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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.