Nucor earnings beat by $0.08, revenue fell short of estimates
On Thursday, Truist Securities adjusted its price target for VF Corp (NYSE:VFC) shares, increasing it to $24.00 from the previous $20.00, while maintaining a Hold rating on the stock. Trading at $25.56, with an EV/EBITDA multiple of 21.38x, VF Corp’s third-quarter results surpassed expectations, but the firm’s analysts expressed caution due to limited forward growth visibility, particularly at the current valuation. According to InvestingPro analysis, the stock is currently trading above its Fair Value.
VF Corp shares declined in low single-digit percentage (LSD%) following the earnings report, despite the company’s third-quarter performance exceeding analyst predictions. The stock has shown remarkable strength with a 55.61% return over the past six months. Notably, brands like The North Face and Timberland performed well during the quarter. However, softer guidance for the fourth quarter suggests that earlier sales may have been a significant factor in the third quarter’s success.
Additionally, sales trends for Vans, a key brand in VF Corp’s portfolio, continue to face challenges. Truist analysts believe this issue is the primary obstacle for the company’s stock performance. The analysts acknowledged VF Corp’s effective execution of turnaround strategies, especially in cost management, and commended the management for setting conservative short-term expectations.
In their commentary, Truist analysts pointed out that while management’s efforts are commendable, the current stock valuation requires more substantial improvements in the company’s underlying fundamentals before there can be a significant positive impact on share prices. The reiteration of the Hold rating and the adjustment of the price target reflect this cautious stance.
In other recent news, VF Corp has shown impressive performance with its fiscal third-quarter results, exceeding expectations. Adjusted earnings per share were reported at $0.62, surpassing the analyst estimate of $0.33, with a total revenue of $2.83 billion, beating the consensus estimate of $2.75 billion. Multiple analyst firms have responded positively to these developments: Telsey Advisory Group raised their stock target to $27, Citi analysts increased their target to $30, and Stifel analysts set their target at $35, all maintaining their respective ratings on the stock.
In terms of future outlook, VF Corp raised its full-year free cash flow guidance to $440 million, up from a previous forecast of $425 million. However, the company anticipates a decline in revenue of 4% to 6% year-over-year for the fourth quarter. Despite this, both Citi and Stifel analysts predict potential opportunities for the company.
In addition to these financial updates, VF Corp’s Board of Directors declared a quarterly dividend of $0.09 per share, maintaining a tradition of shareholder returns. These recent developments serve as important insights for investors tracking VF Corp’s performance and future prospects.
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