Guggenheim analyst Robert Drbul upgraded Capri Holdings (CPRI) to Buy from Neutral as he believes sentiment on the handbag space is "overly negative," which creates a favorable risk/reward for the stock despite the "several challenges" facing the business. Based on recent commentary from Capri and rival Tapestry (TPR), he thinks the handbag category is more stable than valuations imply, said Drbul, who set a $40 price target on Capri shares. He thinks the strength of Capri's brands and multi-year earnings potential is underappreciated, the analyst added.

Capri Holdings (CPRI) shares could fall to the low-to-mid $20s if Tapestry's (TPR) $57 per share takeover is successfully blocked by the Federal Trade Commission, Yiqin Shen of Bloomberg reports, citing a survey of 20 merger-arbitrage specialists. The survey, conducted on Tuesday, focuses on merger-arbitrage estimates on the Capri's downside price - a level that reflects the stock's fundamental value by the end of 2024, when the outcome of the FTC's challenge is expected to be either upheld or overturned in court, Shen notes. Shares of Capri Holdings are down 5% to $34.81 in midday trading.

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Telsey Advisory lowered the firm's price target on Capri Holdings to $42 from $57 and keeps a Market Perform rating on the shares. The Federal Trade Commission announced it filed a lawsuit to block Tapestry's proposed acquisition of Capri, which was not "too surprising" given recent reporting, the analyst tells investors. The firm lowered its price target on the stock given incremental challenges to the probability of completing the deal.