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On Wednesday, JPMorgan analyst Matthew Boss revised the price target for VF Corp. (NYSE:VFC) shares, reducing it from $18.00 to $15.00, while retaining a Neutral rating on the stock. According to InvestingPro data, VF Corp’s stock currently trades at $12.42, with significant volatility over the past year, ranging from a low of $9.41 to a high of $29.02. The company appears undervalued based on InvestingPro’s Fair Value analysis. The adjustment follows VF Corp.’s guidance for the first quarter of fiscal year 2025, which anticipates a decrease in reported revenues by 3-5% year-over-year on a constant currency basis. This projection falls short of the Street’s expectation of a 1.8% decline. The company’s recent performance shows a revenue decline of 2.51% over the last twelve months, with current revenue at $10.15 billion.
VF Corp. management also forecasts an operating loss ranging from $110 million to $125 million for the quarter, which is significantly lower than the Street’s estimate of a $76 million loss. This translates to an EBIT margin of approximately -6.9% at the midpoint, around 260 basis points below the Street’s estimate of -4.3%. Consequently, the company expects a first-quarter EPS loss of roughly $0.27, which is below the Street’s anticipated loss of $0.22.
Despite these challenges, VF Corp. expects first-quarter gross margins to improve year-over-year, benefiting from reduced discounts and promotions, as well as favorable foreign exchange rates compared to the Street’s forecast of a 130 basis point increase. The company maintains a solid gross profit margin of 52.64% and has demonstrated strong financial discipline with a Piotroski Score of 7. Get deeper insights into VF Corp’s financial health metrics and more with InvestingPro, which offers comprehensive analysis and 10 additional ProTips for informed investment decisions. Selling, general, and administrative (SG&A) expenses are projected to remain flat or slightly decrease year-over-year, as opposed to the Street’s prediction of a 1.1% reduction.
The company’s ongoing global commercial reorganization, which included the layoff of approximately 400 employees worldwide over the past few months, is part of its cost-saving initiatives under the next phase of its Reinvent strategy. This strategy aims to expand net operating income by $500-600 million.
For the full fiscal year 2026, VF Corp. management anticipates free cash flow (FCF) to show a modest increase from fiscal year 2025’s $313 million, which does not account for the sale of non-core physical assets. Furthermore, the company expects EBIT dollars to grow year-over-year, contrasting with the Street’s more optimistic EBIT growth prediction of +19% year-over-year.
JPMorgan’s model implications suggest an EPS of $1.02 for fiscal year 2026, slightly below the Street’s estimate of $1.04, and an EPS of $1.31 for fiscal year 2027, compared to the Street’s forecast of $1.28. While currently showing negative earnings per share of -$0.37, InvestingPro analysts expect the company to return to profitability this year. Notably, VF Corp. has maintained dividend payments for 55 consecutive years, currently offering a dividend yield of 2.49%. The new December 2025 price target is based on 7.9 times JPMorgan’s estimated CY26E EBITDA, which is below VF Corp.’s pre-pandemic average multiple of 9 times. This valuation reflects a fundamental top-line growth and margin profile that is approximately 200 basis points below pre-pandemic levels.
In other recent news, VF Corporation reported its fourth-quarter financial results for 2025, showing a 3% year-over-year decline in revenue to $2.1 billion. Despite this, the company slightly exceeded earnings expectations with an adjusted EPS of -$0.13, better than the forecasted -$0.14. The company also improved its gross margin by 560 basis points to 53.4%, indicating operational efficiencies. VF Corporation’s free cash flow was reported at $313 million, and the company successfully reduced its net debt by 26%.
Looking ahead, VF Corporation expects a revenue decline of 3-5% in the first quarter, with operating and free cash flow anticipated to increase year-over-year. The company also foresees potential tariffs impacting costs by $150 million, which it plans to offset through strategic pricing and cost management. CEO Bracken Darrell expressed confidence in the company’s resilience amid macroeconomic uncertainties.
In terms of analyst perspectives, firms like BMO Capital Markets and Goldman Sachs have shown interest in VF Corporation’s strategies for its Vans brand turnaround and the company’s approaches to mitigating tariff impacts. The company’s efforts to improve its operating profitability seem to be progressing, as indicated by a 400 basis point increase in operating margin to 1%.
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