1 Stock Wall Street Got Wrong

Dear WallStreetZen Member,

This week, our Smart Leverage Alert centers on Tapestry (TPR). 

The company behind Coach and Kate Spade has quietly become one of the strongest stories in consumer retail … Yet many investors still file it under "boring old handbags" and move on.

That's the mistake. In its most recent quarter, Tapestry grew revenue 21% year over year to $1.92 billion and adjusted EPS 62%, powered by a Coach brand posting north of 30% growth as younger shoppers pour in. Management also raised its full-year outlook.

This isn't a company clinging to past glory. It's a brand-led growth engine winning Gen Z, expanding in China and Europe, and throwing off enormous cash. Tapestry plans to return roughly $1.6 billion to shareholders this fiscal year, including about $1.3 billion in buybacks. 

Wall Street is starting to notice, with analysts raising price targets on the back of brand momentum and resilient demand even as tariffs pressure the wider sector.

Our Zen Ratings model confirms the strength. TPR earns an A rating, which amounts to a Strong Buy recommendation, landing in the top 3% of more than 4,600 stocks. It's the #2-ranked stock in the A-rated Luxury industry.

Looking at the Component Grades that shape the overall grade, TPR ranks in the top 18% for Safety, the top 8% for Sentiment, and the top 1% for Financials. That mix points to a financially powerful, well-regarded business the market is still catching up to.

Our Logic

With Zen Options Essentials, we use "Smart Leverage" — Deep-In-The-Money options that let you control shares for a fraction of the cost, with your maximum risk strictly defined from day one.

The "Smart Leverage" Setup: TPR Long Call

Given the strong fundamental case and the brand momentum building behind Coach, here's how we're structuring the trade using Smart Leverage — Deep-In-The-Money calls that move nearly dollar-for-dollar with the stock, but with strictly defined risk from day one.

Instead of committing $14,216 to own 100 shares outright, a Deep-In-The-Money Call lets you control those same shares for $3,410.

• The Play: $115 Strike Call (Expiring Jan 15, 2027)
• Delta: 0.8174 — Right in our sweet spot. This option moves nearly dollar-for-dollar with the stock. You get the upside with significantly less capital at risk.
• Intrinsic Value: ~80% — Four-fifths of what you pay is real value, not time decay. This is what separates a Smart Leverage setup from the kind of speculative options trades that blow up amateur accounts.
• Leverage Multiple: 2.41x — Every dollar moves 2.4x harder than the stock, while the deep ITM strike still keeps meaningful downside protection versus a naked speculative call.
• The Target: For this position to double (+100%), TPR only needs to reach approximately $180 — a roughly 27% move in the stock that produces a 100% return on the option premium.

Why Options Over Shares?

A 27% move in TPR stock would be a solid return for shareholders. In this Deep-In-The-Money option, that same move has the potential to double your investment while putting only $3,410 at risk instead of $14,216.

That's the power of Smart Leverage: stock-like upside with a fraction of the capital and strictly defined risk from day one.

What To Do Next?

TPR is just one of the setups our Zen Options Essentials TradeFinder identified this week.

And the best part? You don't need to spend hours doing research to find these trades. The TradeFinder does the heavy lifting — scanning for Deep-In-The-Money options with the optimal Delta, the right Intrinsic Value, and the right Leverage Multiple — so you can evaluate a trade like this in minutes.

How is that possible?

Because the best options trades aren't about picking exotic strategies or timing the market perfectly. They're about finding great stocks…and using Smart Leverage to control your risk while amplifying your upside.

EXACTLY what the Zen Ratings model is built to find.

EXACTLY what this methodology has been delivering.

If you'd like to see how this entire methodology works, start by watching our presentation, "Options Trading with the Zen Ratings." It walks through the Smart Leverage framework, the TradeFinder, and how we identify these opportunities step by step.

Options Trading with the Zen Ratings >

Or, perhaps you are ready to start using Smart Leverage by becoming a Zen Options Essentials member. Click below to join: 

Zen Options Essentials >

Happy Investing,

Mijusko Sibalic

Senior Writer, Zen Options Essentials

Want to get in touch? Email us at news@wallstreetzen.com.