Capri Holdings Ltd (CPRI): what the price requires

The current priced-in claim for Capri Holdings Ltd (CPRI) is temporarily suppressed because the live engine record is unavailable. The dated report remains a snapshot, not a current market read.

Generated: 2026-07-19 · Source: https://boothcheck.com/report/CPRI

Headline

FieldValue
TickerCPRI
CompanyCapri Holdings Ltd
Current price$17.51/sh
CompositionMichael Kors 83% / Jimmy Choo 17%

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basiswhole-company
Operating margin needed2.0%
Operating margin (mid-cycle)6.8%
Margin compression implied-4.8pp
Trailing margin (depressed year)2.0%
Multiple paid13x mid-cycle operating income

The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.

The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.

Solve inputs: computed at a 7.8% cost of capital with 4% terminal growth over a 5-year stage.

Reconcile: at the x-ray's 9.3% required return this reads ~3.4%/yr; the models below use their own rates.

How unusual the bet is: within-range

ReferenceValue
vs own history-0.23σ
cohort percentile (of 212 peers)26
implied end-window share0%

Valuation X-Ray

The price is supported by asset-based and earnings-power and relative-multiple value, while growth-DCF lands below the price. A value/asset-supported name, not a pure growth bet.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset1.13x4expensive
Earnings0.99x3justifies
Relative1.12x5expensive
Growth2.13x2expensive

Families that justify the price: Asset, Earnings, Relative Families that call it expensive: Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.1%); the inversion above states its own rate.

Per-Model Detail (n=14)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$0.00—noFCF base $0.0B, growth -10% (input: historical growth), terminal g 0.5%, WACC 7.1%, 5yr projection
DCF Exit MultipleGrowth$10.761.63xyesExit EV/EBITDA: 21.7x / 23.7x / 25.7x (bear / base = today's held flat / bull), 5yr
Relative ValuationRelative$15.691.12xyesP/E 20x (static sector reference · 2026-04), scenarios: 17.0x / 20.0x / 23.0x (bear / base = reference held flat / bull), EV/EBITDA 16.2x
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$12.281.43xyesBV/sh $0.66, ROE (TTM) 171.3%, ke 9.3%
Two-Stage Excess ReturnAsset$244.620.07xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$6.652.63xyesRev $3.5B, growth -15% (input: historical growth; tapered), Terminal P/S: 0.5x / 0.6x / 0.7x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair ValueRelative$13.681.28xyesEPS $1.14, growth 1% (input: historical EPS growth), PEG=12.08 (Overvalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$17.710.99xyesNormalized EBIT (5y avg op income, one-time charges added back) $0.32B × (1−21%) / WACC 7.1% → EPV (no growth)
Residual IncomeAsset$21.100.83xyesBV $0.66 + 5yr PV of (ROE (TTM) 171.3% − Kₑ 9.3%) × BV; BV grows 8.8%/yr
Graham NumberAsset$4.124.25xyes√(22.5 × EPS $1.14 × BVPS $0.66) — Graham's conservative floor
EV/EBITDA RelativeRelative$4.753.69xyesEBITDA $0.14B × sector EV/EBITDA 13.0x
FCF YieldEarnings$0.011750.50xyesFCF $14.0M / Kₑ 9.3% — zero-growth perpetuity (excluded from median)
SBC-Adj FCF YieldEarnings——no—
Ben Graham FormulaEarnings$36.780.48xyesEPS $1.14 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset——no—
P/Sales SectorRelative$43.210.41xyesRevenue $3.47B × sector P/S 1.5x
PEG Fair ValueRelative$42.750.41xyesEPS $1.14 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x
Earnings YieldEarnings$12.321.42xyesEPS $1.14 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net debt$236.0m
Net debt / NOPAT (after-tax)1.18x
Net debt / operating income (pre-tax)0.93x
Share count CAGR (buyback)-5.7%
Burning cashno

Leverage and coverage are computed on normalized mid-cycle operating income (mid-cycle margin 6.8%); the trailing year was depressed.

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

Bull Case

Lead with where the price sits against the methods, because Capri is no longer the screaming distress case it was. At $20.32 (June 27, 2026) the price lands near the cluster of valuation lenses rather than far above or below: the relative-multiple view near $16, Earnings Power Value near $24, residual income near $21, and the Ben Graham formula near $37 bracket the price, with the earnings-power lens actually supporting it. The inversion implies only about 0.5% annual operating growth, an undemanding bar that says the market is pricing a stabilizing, roughly flat business, not a continuing collapse. After years of being priced for failure, Capri is now priced for survival.

The balance-sheet transformation is the foundation. Capri sold Versace to Prada for $1.375 billion in December 2025 and used the proceeds to slash debt, ending the quarter with only about $80 million of net debt. That sale also drove the company back to net income of $138 million, a sharp reversal from the $1.2 billion net loss in fiscal 2025. A luxury house that was drowning in debt and write-downs a year ago is now nearly debt-free, which removes the existential risk and lets management focus on the two remaining brands.

The brand-level signals are improving where it matters. Jimmy Choo returned to growth in the back half of fiscal 2026 and is guided back to profitability in fiscal 2027. Michael Kors, the larger brand, saw sales dip 5.6% but with stronger full-price sell-through, better traffic, and rising average unit retail, the early markers of a healthier business even before the top line turns. Capri's 10-K describes the Michael Kors positioning to "target a broad customer base while retaining our premium luxury image" (accession 0001530721-25-000052). For fiscal 2027 management guides to low-single-digit revenue growth and roughly 40% EPS growth, with a longer-term path to $4 billion in Michael Kors revenue and $800 million at Jimmy Choo. The bull case is a deleveraged, two-brand turnaround priced at a level the methods support, with the smaller brand already inflecting and the larger one showing quality-of-sales improvement.

Bear Case

The competitive disruption that defines the bear case is the structural weakening of accessible luxury, the exact segment Michael Kors occupies. The brand sits between mass fashion and true luxury, and that middle has been squeezed from both sides: European houses like Louis Vuitton and Gucci have pulled aspirational buyers up-market, while fast-fashion and resale platforms have absorbed price-conscious shoppers below. Michael Kors over-distributed and over-discounted for years, eroding the brand equity that justifies a premium price, and rebuilding it is slow, uncertain work. The 5.6% sales decline shows the brand is still shrinking even as management cleans up the quality of those sales. With Michael Kors at about 83% of the company, Capri's fate rests on rehabilitating a brand in a structurally pressured category.

Several asset-based readings are distorted by a tiny book value per share near $0.66, which produces an implausible 171% trailing ROE and a $244 two-stage excess-return figure that should be ignored. The cleaner lenses are more sober: the DCF exit-multiple near $13 and discounted-future-market-cap near $11 sit below the price, the Peter Lynch screen flags overvaluation at an extreme PEG, and trailing revenue growth is negative at about minus 4%. The price is justified mainly by the earnings-power lens, which means it depends on the current, depressed operating income holding rather than improving.

The turnaround is not guaranteed, and the macro backdrop is unhelpful. Luxury demand is cyclical and currently soft, especially among the aspirational consumers Michael Kors needs, and a weaker economy would hit discretionary handbag and footwear spending directly. A company director sold his entire stake, an insider signal worth noting. Capri tried and failed to sell itself to Tapestry in a deal blocked on antitrust grounds, so the strategic-acquirer backstop is gone. The bet against Capri is that Michael Kors keeps shrinking faster than Jimmy Choo can grow, that the accessible-luxury squeeze is secular rather than cyclical, and that a flat-to-down business does not earn even the modest multiple the price implies.

Valuation

At $20.32, inverting the price puts Capri at roughly 14x company-wide mid-cycle operating income, which solves to about 0.5% annual operating growth over a five-year stage at an 8.3% cost of capital. The engine uses through-the-cycle margins on current revenue rather than the depressed trailing quarter, because earnings are cyclically suppressed. The implied bar is essentially flat, which is the market pricing a stabilizing turnaround rather than a recovery or a further decline.

The model families need careful reading because a tiny book value distorts the asset lens. Simple excess return near $12 and especially the two-stage excess-return figure near $244 are artifacts of a $0.66 book value per share and a 171% trailing ROE, and should be discounted. The more reliable lenses cluster around the price: relative valuation near $16, Earnings Power Value near $24, residual income near $21, and the DCF exit-multiple near $13. The blended X-ray near $14 sits modestly below the price. The earnings-power lens is the one that supports the quote.

The valuation conclusion is that the price is broadly fair on the cleaner methods, supported by earnings power and bracketed by the relative and asset lenses, with the growth methods saying it is full. The deleveraging from the Versace sale removed the downside tail that used to dominate the analysis. What is left is a bet on operating stabilization: if Jimmy Choo keeps growing and Michael Kors stops shrinking, the earnings-power support holds and the fiscal 2027 EPS growth guidance is achievable. If Michael Kors keeps declining, the growth methods near $11 to $13 become the relevant anchor.

Catalysts

Fiscal 2027 guidance is the bar to watch. Management guides to low-single-digit revenue growth and roughly 40% EPS growth, a sharp inflection from the recent decline. The next earnings reports test whether Michael Kors's improving full-price sell-through and traffic translate into a top-line turn, and whether Jimmy Choo's return to growth holds and reaches the guided profitability in fiscal 2027.

The Versace sale and deleveraging are the completed structural catalyst. The $1.375 billion sale to Prada closed in December 2025, cut net debt to about $80 million, and restored net income to $138 million. The remaining question is how management deploys the financial flexibility, whether toward brand reinvestment, buybacks, or further portfolio moves.

Brand-rehabilitation metrics are the operating reads. For Michael Kors, watch average unit retail, full-price mix, and whether the 5.6% sales decline narrows; for Jimmy Choo, watch the pace of growth toward the $800 million long-term target. The dominant external variables are luxury demand, which is cyclical and currently soft among aspirational consumers, and currency, given Capri's global retail footprint. An insider sale of an entire director stake is a sentiment flag to keep in view.

Sources: Capri lifts 2026 outlook on Jimmy Choo (StockInvest), Capri Q2 fiscal 2026 results (Capri Holdings), Capri Versace sale 8-K (SEC)

Peer Cohorts (Per Segment, With Filing Citations)

Michael Kors (reported)

Jimmy Choo (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

View the full interactive CPRI report on boothcheck