Capri Holdings (CPRI) Valuation Check After $1.4 Billion Versace Sale and Debt-Reduction Push
Capri Holdings refocuses after Versace sale
Capri Holdings (CPRI) has officially closed the $1.375 billion cash sale of its Versace business to Prada, a move that immediately reshapes the company’s balance sheet and long term strategic focus.
See our latest analysis for Capri Holdings.
The stock has responded quickly to the Versace sale narrative, with a roughly 34 percent year to date share price return and a strong recent upswing, even though the three year total shareholder return remains deeply negative.
If this kind of turnaround story has your attention, it could be worth exploring other consumer names using our screener for fast growing stocks with high insider ownership to spot similar momentum with insider conviction.
With shares up sharply this year yet still trading at a steep intrinsic discount, investors now face a key question: Is Capri a mispriced turnaround with fresh balance sheet firepower, or has the market already baked in the recovery?
Most Popular Narrative: 5.7% Overvalued
With Capri’s shares last closing at $27.66 versus a narrative fair value of about $26.17, the market is pricing in a modest premium that hinges on a sharp profitability swing despite shrinking sales.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 12.5x on those 2028 earnings, up from -2.2x today. This future PE is lower than the current PE for the US Luxury industry at 20.5x.
Want to see how falling revenue, rising margins, and a re rated earnings multiple all fit together into that price view? The full narrative reveals the exact profit swing, the projected earnings base, and the premium that still leaves Capri below luxury peers on valuation. Curious which assumptions carry the most weight in this tight upside case? Read on to unpack the full blueprint.
Result: Fair Value of $26.17 (OVERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, sustained revenue declines at Michael Kors and intensifying tariff pressures could derail margin recovery and challenge confidence in Capri’s long term turnaround.
Find out about the key risks to this Capri Holdings narrative.
Another View: Cash Flow Story Says Deep Undervaluation
While the narrative fair value suggests Capri is modestly overvalued, our DCF model paints a very different picture. It implies a fair value of about $65.22 per share, which is more than double today’s $27.66. Is the market underestimating the turnaround, or is the cash flow optimism too generous?
Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Capri Holdings for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 912 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.
Build Your Own Capri Holdings Narrative
If you see the story differently, or simply want to dig into the numbers yourself, you can build a custom view in minutes: Do it your way.
A great starting point for your Capri Holdings research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.
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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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