Tapestry (NYSE: TPR) was downgraded to Hold from Buy by Jefferies, which lowered its price target to $138 from $142.

Jefferies said it raised its second-quarter estimates above consensus based on accelerating alternative data through December, but slightly reduced longer-term projections due to the risk of an average unit retail-driven slowdown. The downgrade was driven by a more balanced risk-reward profile following the stock's recent run-up.

The firm noted that a strong December 2025 quarter and potential tariff repeal could act as near-term catalysts, but said upside appeared largely reflected in the current valuation. Tapestry was trading in the low-20s on a price-to-earnings basis, well above its historical average of roughly 12x, peer multiples near 16x, and at a significant premium to the retail ETF benchmark.

Jefferies cited risks including difficult average unit retail comparisons, potential slowing fashion cycles, and increased discounting in the U.S. market, particularly among younger consumers. While the company's nearly 90% direct-to-consumer mix and customer-focused innovation strategy were viewed as long-term strengths, the firm said valuation should trade at a discount given Tapestry's more fashion-oriented portfolio.

Tariff repeal could provide an estimated $0.40 per share earnings boost, though Jefferies said this was less incremental for Tapestry than for some peers given its strong margins and mitigation strategies.