Capri Holdings Stock Rises On Reported Bid For Versace From Prada But Retail’s Bearish

Capri Holdings shares ($CPRI) have been in the spotlight as the company’s Versace brand could receive a bid from Italy’s Prada, according to media reports. Retail sentiment, however, remained ‘bearish.’

Italy's Prada emerged as a potential bidder for the brand after parent Capri continued to explore a possible sale, Reuters reported.

Capri Holdings brands have seen  sales decline as the broader luxury sector has been hit by reduced spending by wealthy Chinese, added the report. The company continues to look at options after Tapestry scrapped a potential $8.5 billion deal to buy parent Capri. The luxury fashion giants cited uncertainty in the legal process for ending the deal.

Sentiment on Stocktwits has been ‘bearish’ over the past week, with message volumes rising to ‘normal’ from ‘low’ a week ago on Monday.

CPRI sentiment meter and message volumes on Jan 13 as of 4:45 am ET

Meanwhile, UBS raised the firm's price target to $21 from $20 with a ‘Neutral’ rating, The Fly.com reported. According to the firm, the market still underestimates how deregulation and reduced government spending could supercharge apparel and footwear spending as well as sentiment, added the report.

Citi also upgraded Capri from ‘Neutral’ to ‘Buy,’ raising the price target to $29 from $21.00.

According to the analyst, the company’s current valuation may be under-valuing its strong brands, which have a favorable risk and reward scenario.

Capri Holdings’ subsidiaries focus on sportswear, footwear, and branded women's and men's apparel, including brands such as names such as Versace, Jimmy Choo, and Michael Kors.

Capri stock is up 11% year-to-date.

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