On Friday, Stifel analysts maintained a Buy rating for VF Corp (NYSE:VFC) with a steady price target of $27.00. The firm expressed a positive outlook for the company’s shares in anticipation of the third-quarter fiscal year 2025 earnings, due January 29, predicting that consensus estimates will likely increase. The stock has shown remarkable momentum, gaining 62% over the past six months and trading near its 52-week high. Analysts at Stifel have forecasted revenue and EPS figures for both the third and fourth quarters that exceed consensus estimates by $52 million and $0.05, and $124 million and $0.28, respectively.Get deeper insights into VFC’s valuation metrics and 13 additional key ProTips with InvestingPro.
The analysts highlighted The North Face brand as a key driver for the anticipated upside, while also expecting an improved rate of revenue decline for the Vans brand. There is optimism that Vans could return to growth by the fourth quarter of fiscal year 2025, although a full recovery under new leadership is anticipated to take several quarters.
Stifel’s analysis suggests that the ongoing turnaround phase for VF Corp combines elements of uncertainty with potential for growth. The firm believes that as the company demonstrates sustainable top-line growth and margin expansion, which in turn realigns net leverage, the stock could move into the mid-$30 range or higher. This shift would also see the valuation framework transition from EV/EBITDA to P/E.
The analysts reaffirmed their Buy rating, indicating that with successful execution, there is a possibility to raise the price target from the current $27. This outlook is based on VF Corp’s performance and the strategic steps the company is taking to strengthen its brands and financial standing, with analyst targets ranging from $14 to $39 per share.
In other recent news, VF Corp has been the focus of several major developments. Guggenheim has maintained its Buy rating on VF Corp while raising its stock target to $27, citing expected improvements in top-line performance, better operating margins, and ongoing balance sheet deleveraging. TD Cowen also increased VF Corp’s price target to $24, recognizing the company’s successful debt reduction and transformation strategy.
The company’s recent earnings report showed a year-over-year revenue decline of 6% for Q2 of fiscal year 2025, an improvement from the 10% decline in Q1. However, the gross margin increased to 52.2%, and operating income stood at $315 million. VF Corp’s diluted earnings per share were noted at $0.60, slightly down from the previous fiscal year.
In strategic moves, VF Corporation divested Supreme, generating net proceeds of about $1.5 billion and repaid $1 billion of term loans. The corporation also achieved $65 million in cost savings in Q2, amounting to $300 million for the fiscal year. For the upcoming quarters, VF Corporation projects Q3 revenue between $2.7 billion and $2.75 billion, with a decline of 1% to 3% year-over-year. These recent developments demonstrate VF Corporation’s ongoing efforts to strengthen its financial health and prepare for future growth.
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