Tapestry's (TPR) fiscal Q4 results showed a slowdown in Coach's North American business, but stronger international growth could support the company's growth trajectory, Morgan Stanley said.

Coach North America growth slowed to 10% year over year in Q4, while international sales grew 23%, above Morgan Stanley's 18% estimate and accounting for about 60% of incremental Coach growth, according to the report Thursday.

For fiscal 2027, Tapestry expects Coach sales to grow in the low-teens percentage range in Q1, implying about 25% international growth despite mid-single-digit North America growth, while guiding full-year earnings per share to $7.80 to $7.90.

The analyst expects fiscal 2027 EPS upside from stronger Coach sales, continued international outperformance and potentially conservative tariff and SG&A assumptions. The firm noted that the key question is whether international growth can offset North America's normalization and sustain overall growth.

Morgan Stanley maintained its overweight rating on the stock and cut its price target to $159 from $164.

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