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On Tuesday, Stifel analysts maintained a Buy rating on VF Corp (NYSE:VFC) shares with a steady price target of $35.00. The analysts highlighted the company’s potential for growth, emphasizing the strong performance trends in its The North Face and Timberland brands. Trading at $16.44, significantly below its 52-week high of $29.02, and with InvestingPro analysis indicating the stock is currently undervalued, Stifel believes the current valuation does not fully recognize the positive developments in these key brands. The company has maintained dividend payments for an impressive 55 consecutive years, demonstrating long-term financial stability.
The analysts observed that VF Corp’s stock experienced a 29.9% decline compared to the S&P 500’s 2.9% drop over the same period. They pointed to the company’s price-to-earnings ratio of 9.4x based on the forecasted fiscal year 2027 earnings per share of $1.75, suggesting it undervalues the healthy trends in The North Face and Timberland.
Stifel anticipates that VF Corp’s strategic global execution in the outdoor market, particularly with The North Face, along with Timberland’s increasing relevance, especially its iconic yellow boot, will contribute to a revenue upswing in the fiscal year 2026. With current revenue of $10.1 billion and a gross profit margin of 52.6%, this strategic positioning could help reverse the recent 2.5% revenue decline. This, they believe, will bolster investor confidence in the sustainability of the company’s earnings across its diverse brand portfolio.
The analysts also addressed investor attention on the Vans brand, which accounts for 25% of VF Corp’s revenue and a high percentage of profit. While Vans is seen as a crucial component to the company’s multi-year value growth, Stifel notes that it represents only 11% of revenue improvement and 31% of profit improvement from fiscal year 2025 to fiscal year 2027. These projections are deemed reasonable by the analysts.
In conclusion, Stifel expressed approval of VF Corp’s leadership and strategic direction. They anticipate that effective execution of the company’s plans will lead to a recovery in its stock valuation.
In other recent news, VF Corporation reported its third-quarter fiscal year 2024 earnings, surpassing analysts’ expectations with an adjusted diluted earnings per share (EPS) of $0.62, compared to the forecasted $0.33. The company’s revenue also exceeded projections, reaching $2.83 billion against an expected $2.75 billion. Additionally, VF Corp announced the redemption of its 2.4% Senior Notes due in 2025, as part of its strategy to manage its debt obligations. Analysts at Stifel maintained a Buy rating on VF Corp with a price target of $35, citing the company’s strategic initiatives and potential for earnings growth. Conversely, Jefferies lowered its price target to $23, maintaining a Hold rating due to uncertainties about sales growth for The North Face and Vans brands. Needham initiated coverage of VF Corp with a Buy rating and a $28 price target, noting optimism in the company’s turnaround efforts under CEO Bracken Darrell. These developments reflect VF Corp’s ongoing efforts to strengthen its financial position and improve its market performance.
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