Stryker shares tumble despite strong Q2 results and raised guidance
On Wednesday, Stifel analysts increased the price target for VF Corp (NYSE:VFC) shares to $35.00, up from the previous target of $27.00, while maintaining a Buy rating on the stock. The analysts highlighted VF Corp’s third fiscal quarter, which demonstrated a turnaround in revenue, better-than-expected performance in brand fundamentals, and achievements in gross margin and expense management. The company’s balance sheet also showed significant improvement, with a year-over-year net debt reduction of $1.95 billion. According to InvestingPro data, six analysts have recently revised their earnings estimates upward for the upcoming period, while the stock has delivered impressive returns of over 64% in the past six months.
VF Corp’s guidance for the fourth fiscal quarter and the commentary for the first half of fiscal year 2026 were described as conservatively subdued. This approach is seen as an intentional effort to moderate the expectations of sell-side analysts. Despite this, Stifel’s own estimates remain above the company’s guidance, based on their optimistic view of VF Corp’s potential opportunities. While current InvestingPro data shows a revenue decline of 9.54% over the last twelve months, the company maintains a strong tradition of shareholder returns, having maintained dividend payments for 54 consecutive years. For deeper insights into VF Corp’s financial health and future prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
Stifel’s analysts believe that with the company’s net debt to EBITDA ratio expected to fall below 3.0X, the valuation of VF Corp will likely shift towards a price-to-earnings (P/E) framework. While acknowledging certain challenges such as revenue rebasing due to exiting wholesale doors and closing retail locations, as well as foreign exchange headwinds, Stifel expresses increased confidence in the direction of the company’s margins.
The analysts anticipate that with consistent execution, VF Corp’s shares could reflect earnings per share (EPS) of over $2.00 within the next 12 months. The improved confidence in brand fundamentals and margin trajectory has led to the decision to raise the 12-month price target to $35. This target is based on a 20X multiple of Stifel’s adjusted EPS estimate of $1.75 for fiscal year 2027.
In other recent news, VF Corp reported impressive third quarter fiscal 2025 results, with adjusted earnings per share of $0.62, notably exceeding the analyst estimate of $0.33. The company’s revenue for the quarter ending December 28, 2024, was $2.83 billion, surpassing the consensus estimate of $2.75 billion. These are recent developments that investors should note.
In addition to the strong earnings and revenue results, VF Corp increased its full-year free cash flow guidance to $440 million from a previous forecast of $425 million. However, it anticipates a decline in revenue of 4% to 6% year-over-year for the fourth quarter, or 2% to 4% in constant currency terms.
Furthermore, VF Corp’s Board of Directors declared a quarterly dividend of $0.09 per share, payable to shareholders on record as of March 10, 2025. Despite the mixed outlook for the coming quarter, the company remains committed to delivering value to its stakeholders.
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