Analysts Conflicted on These Services Names: Tapestry Inc (NYSE: TPR) and Carvana Co (NYSE: CVNA)

By Jason Carr

Analysts have been eager to weigh in on the Services sector with new ratings on Tapestry Inc (TPRResearch Report) and Carvana Co (CVNAResearch Report).

Tapestry Inc (TPR)

Oppenheimer analyst Brian Nagel maintained a Buy rating on Tapestry Inc today and set a price target of $50. The company’s shares closed yesterday at $30.75, close to its 52-week low of $30.05.

Nagel commented:

“Market sentiment toward shares of Tapestry (TPR) has deteriorated lately, as investors have fretted increasingly over persistently weak sales and uneven margins at the company. Thus far in 2019, TPR is down 9%. The largely in-line fiscal Q3 (Mar.) result that TPR reported today, while by no means signaling a clear end to the woes of the company, should comfort investors that trends have seemingly stabilized. Overall, sales at Coach tracked a bit higher, while top line trends at Kate Spade improved upon the launch of a new collection. Clients should interpret our Outperform rating on TPR as a relative call within the handbag segment of our coverage. Amongst leading brands, we continue to look much more favorably upon Nike (NKE) and lululemon (LULU).”

According to TipRanks.com, Nagel is a 5-star analyst with an average return of 8.9% and a 64.5% success rate. Nagel covers the Services sector, focusing on stocks such as Weight Watchers International, Dick’s Sporting Goods, and Advance Auto Parts.

Currently, the analyst consensus on Tapestry Inc is a Strong Buy with an average price target of $45.33, which is a 47.4% upside from current levels. In a report issued on April 30, UBS also maintained a Buy rating on the stock with a $50 price target.

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Carvana Co (CVNA)

In a report released today, Gary Prestopino from Barrington maintained a Hold rating on Carvana Co. The company’s shares closed yesterday at $71.65, close to its 52-week high of $74.17.

Prestopino said:

“We believe Carvana has significant long-term growth potential in the used vehicle market. According to NADA (National Automobile Dealers Association), there were approximately 28.4 million used vehicles sold at dealerships in 2018. Carvana has sold 112,410 used vehicles on a TTM basis, representing slightly less than 0.4% of the total used vehicle market. We have a MARKET PERFORM investment rating on the shares.”

According to TipRanks.com, Prestopino is a 2-star analyst with an average return of 0.1% and a 40.5% success rate. Prestopino covers the Services sector, focusing on stocks such as Kar Auction Services Inc, Payment Data Systems Inc, and US Auto Parts Network.

The word on The Street in general, suggests a Moderate Buy analyst consensus rating for Carvana Co with a $64.95 average price target, representing a -9.4% downside. In a report issued on April 30, Wedbush also maintained a Hold rating on the stock with a $65 price target.

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