Gold prices rise from 2-wk low with focus on Russia-Ukraine, Jackson Hole
On Thursday, Stifel analysts adjusted their outlook on VF Corp (NYSE:VFC), the apparel giant known for brands such as The North Face and Vans, by significantly reducing the price target from $28.00 to $15.00. Despite the lowered price target, Stifel maintained a Buy rating on the company’s stock. The stock, currently trading at $12.15, has experienced significant volatility, declining over 18% in the past week alone. According to InvestingPro data, analyst targets for VFC range from $9 to $40, reflecting diverse market opinions about the company’s prospects.
The reassessment by Stifel comes as VF Corp’s turnaround efforts appear to be trailing expectations. The company’s fourth fiscal quarter showed mixed results, with its Outdoor segment, including The North Face and Timberland, experiencing growth of 4% and 13% in constant currency (cc) respectively. Additionally, gross margins improved significantly, with a year-over-year increase of 560 basis points. InvestingPro analysis shows the company maintains a solid gross profit margin of 52.64% and has impressively maintained dividend payments for 55 consecutive years, despite current challenges. For deeper insights into VFC’s financial health and future prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
However, Vans, another key brand in VF Corp’s portfolio, saw its sales sharply decline by 20% in constant currency compared to the previous year. Stifel noted that efforts to enhance the quality of sales for Vans are having an impact, accounting for approximately 60% of the year-over-year decline. These measures, along with direct-to-consumer (DTC) traffic challenges, are expected to continue affecting the brand’s performance into the third fiscal quarter of 2026.
The analysts remain optimistic about VF Corp’s long-term prospects, citing the strength and durability of its brand portfolio and the potential for margin improvements. They also highlighted that the annualized gross tariff impacts, amounting to $150 million, could be mitigated and that the company’s cost improvement objective of $500-$600 million by fiscal year 2028 seems to be on track.
Despite these positive factors, the anticipated return to top-line strength and corresponding balance sheet enhancement is now expected to be delayed. Consequently, Stifel has revised its earnings per share (EPS) estimate for fiscal year 2027 sharply downwards, from $1.75 to $1.00. The new $15 price target is based on 15 times the price-to-earnings (P/E) ratio on the revised fiscal year 2027 EPS estimate, or 0.9 times the enterprise value to fiscal year 2027 sales (EV/FY27S), and 9.2 times the enterprise value to fiscal year 2027 earnings before interest, taxes, depreciation, and amortization (EV/FY27EBITDA). Based on InvestingPro’s Fair Value analysis, VFC currently appears undervalued, with additional metrics and insights available to Pro subscribers.
In other recent news, VF Corporation reported its fourth-quarter financial results for 2025, revealing a slight beat on earnings per share (EPS) but a decline in revenue compared to the previous year. The company’s revenue decreased by 3% year-over-year to $2.1 billion, while adjusted EPS was reported at -$0.13, slightly better than the forecasted -$0.14. Despite these challenges, VF Corporation managed to improve its operating and gross margins, indicating some operational efficiencies. Analysts have adjusted their outlooks in response to these results, with BMO Capital Markets, Truist Securities, Needham, and JPMorgan all reducing their price targets for VF Corp shares, citing concerns about the performance of the Vans brand and the broader implications for the company’s financial health. BMO Capital Markets and Needham set their new price targets at $15, while Truist Securities lowered its target to $13. Meanwhile, JPMorgan maintained a neutral rating with a revised price target of $15. VF Corp’s management remains focused on its Reinvent strategy to improve cost management and meet mid-term savings goals, although the path to a Vans turnaround appears lengthy and uncertain. The company expects first-quarter revenue to decline by 3-5%, with an anticipated operating loss ranging from $110 million to $125 million.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.