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Investing.com - Stifel downgraded VF Corp. (NYSE:VFC) from Buy to Hold while raising its price target to $16.00 from $15.00, citing a balanced risk/reward profile following recent share price gains. According to InvestingPro data, the company currently trades at a P/E ratio of 54.8x, though its PEG ratio of 0.58 suggests potential undervaluation relative to growth expectations.
The stock has outperformed the broader market with a 12.5% return over the past month compared to the S&P 500’s 2.6% gain, prompting the rating adjustment despite the higher price target.
Stifel highlighted the company’s $600 million Dickies sale as a strong outcome, representing 1.2x EV/S and 15x EV/EBITDA on forward brand estimates, which helps alleviate VF Corp.’s capital constraints by improving net leverage by 0.6x.
The resulting $9 billion pro forma business includes favorable trends in the Outdoor segment, estimated to grow at mid-single-digit percentages with favorable margins, though the Vans business continues to search for a new base and normalized growth rate.
Stifel noted that VF Corp.’s current valuation of 9.8x EV/EBITDA on pro forma FY27 estimates aligns with lifestyle apparel peers, adding that further share price appreciation would require confidence in accelerating fundamentals that could be approximately a year away.
In other recent news, VF Corp. has made significant strides with the sale of its Dickies brand to Blue Star Alliance for $600 million in cash. This transaction, expected to close by the end of 2025, is aimed at reducing VF Corp.’s debt and aligning with management’s priority of addressing upcoming financial obligations. Barclays has reiterated its Overweight rating and a $19.00 price target on VF Corp., noting that the sale provides sufficient funds to address a EUR500 million debt maturity due in March 2026. Meanwhile, Evercore ISI maintained its "In Line" rating and $15.00 price target, acknowledging the sale’s impact on near-term debt concerns but highlighting ongoing balance sheet challenges.
Williams Trading, however, reiterated a Sell rating with a $10.00 price target, emphasizing the company’s continued financial hurdles despite the transaction. In a positive development, Baird upgraded VF Corp. to Outperform, citing potential recovery in the Vans brand and increased consumer engagement through new product and social media initiatives. This upgrade included a raised price target from $14.00 to $20.00. These recent developments reflect varied analyst opinions on VF Corp.’s financial outlook and strategic moves.
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