VF Corp. stock rating reiterated at Barclays after Dickies sale

Investing.com - Barclays has reiterated its Overweight rating and $19.00 price target on VF Corp. (NYSE:VFC) following the company’s sale of its Dickies brand. According to InvestingPro data, analysts’ price targets for VF Corp range from $10 to $40, with the stock currently appearing undervalued based on Fair Value analysis.

The sale of Dickies provides VF Corp. with sufficient funds to address its upcoming EUR500 million long-term notes due in March 2026, according to Barclays. The transaction aligns with management’s previously stated priority of reducing debt primarily through free cash flow. With a current debt-to-equity ratio of 4.39x and an InvestingPro Financial Health Score of "Fair," this debt reduction strategy appears crucial for the company’s financial stability.

The all-cash consideration of $600 million from the Dickies sale will enable VF Corp. to reduce its net debt level while being "accretive to our growth on a pro-forma basis." For fiscal year 2025, Dickies generated net sales of $542 million for the 12 months ending March 31, 2025.

VF Corp. previously reported that its ’Work’ segment, which included only Dickies and Timberland PRO, recorded fiscal year 2025 revenues of $833 million, operating profit of $53 million, and an operating margin of 6.4%.

The $600 million proceeds can pay down at least EUR500 million (approximately USD588 million) of VF Corp.’s total long-term debt outstanding of approximately $4.15 billion as of the end of the first quarter of fiscal year 2026, potentially improving the company’s net debt leverage ratio, which stood at 4.1 times fiscal year 2025 adjusted EBITDA. Looking ahead, InvestingPro analysis indicates expected sales growth and improving profitability, with EPS forecast at $0.73 for FY2026. For deeper insights into VF Corp’s financial health and growth prospects, including 10+ additional ProTips and comprehensive valuation metrics, explore the full Pro Research Report available on InvestingPro.

In other recent news, VF Corp. announced the sale of its Dickies brand to Blue Star Alliance for $600 million in cash. This transaction is aimed at addressing VF Corp.’s near-term debt concerns, particularly with an upcoming $500 million debt maturity in March 2026. The sale, expected to close by the end of 2025, is anticipated to reduce VF Corp.’s debt levels and potentially enhance its growth on a pro-forma basis, according to the company’s President and CEO, Bracken Darrell. Evercore ISI maintained its "In Line" rating on VF Corp. with a price target of $15.00, while Williams Trading reiterated its Sell rating with a $10.00 price target following the announcement.

Additionally, VF Corp. received an upgrade from Baird, which raised its stock rating from Neutral to Outperform and increased its price target to $20.00. Baird’s upgrade was driven by the potential recovery of VF Corp.’s Vans brand and improved financial performance as challenges subside. Meanwhile, former VF Corp CFO Matt Puckett has transitioned to Ibotta, Inc. as their new Chief Financial Officer, bringing his extensive financial expertise from his 23-year tenure at VF Corp. These developments reflect significant strategic moves and analyst perspectives that investors may want to consider.

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