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On Monday, TD Cowen maintained a Hold rating on VF Corp (NYSE:VFC) shares and raised the price target to $25 from $24. The adjustment reflects a positive outlook on the company's potential performance in the upcoming quarters. According to InvestingPro data, VF Corp's stock has shown remarkable momentum, with a 62.16% gain over the past six months and is currently trading near its 52-week high of $26.48. TD Cowen's analysts cited VF Corp's year-to-date share increase of over 23%, driven by investor confidence in the company's restructuring efforts, particularly within its Vans and The North Face brands.
The analysts anticipate that VF Corp will surpass its conservative guidance, with the fourth quarter possibly showing flat to low single-digit year-over-year revenue growth at the higher end. While the company faces challenges with a -9.54% revenue decline in the last twelve months, InvestingPro analysis indicates the stock is currently trading at elevated multiples, with an EV/EBITDA ratio of 21.56x. The revised price target is based on a 16 times multiple of the estimated earnings per share (EPS) for the fiscal year 2027. InvestingPro subscribers have access to 13 additional key insights about VF Corp's valuation and momentum indicators.
VF Corp has outperformed sales and EPS expectations in the first and second quarters of fiscal year 2025, a trend that analysts believe will extend into the third quarter. The company has consistently beaten consensus sales and EPS over the past two quarters. VF Corp's CEO, Bracken Darrell, expressed confidence in the company's ongoing transformation during the ICR 2025 conference, highlighting progress in key brands such as Vans, The North Face, and Timberland.
In light of these developments, TD Cowen has increased its second half and full-year fiscal 2025 EPS estimates. The third-quarter EPS forecast has been adjusted upward to $0.43, which is notably higher than the consensus of $0.34, indicating potential for a positive surprise. The fourth-quarter EPS estimate has been set at ($0.13), aligning with consensus, and resulting in a full-year fiscal 2025 EPS estimate of $0.55, which is ahead of the $0.46 consensus.
The upcoming March investor day was also mentioned as another potential catalyst for VF Corp, as it could provide further insight into the company's strategic initiatives and performance expectations. Despite recent challenges, VF Corp maintains a strong dividend tradition, having paid dividends for 54 consecutive years, with a current yield of 1.37%. For comprehensive analysis of VF Corp's financial health and future prospects, investors can access the detailed Pro Research Report available on InvestingPro, which provides in-depth analysis of the company's valuation, growth potential, and market position.
In other recent news, VF Corporation has been the subject of several significant developments. The company's Q2 earnings for the fiscal year 2025 reported a year-over-year revenue decline of 6%, an improvement from a 10% decline in Q1. The gross margin increased to 52.2%, and operating income stood at $315 million. VF Corporation'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.
Analysts from Stifel, Guggenheim, and TD Cowen have maintained their positive ratings on VF Corporation, adjusting their price targets based on the company's recent performance and future prospects. These recent developments highlight VF Corporation's ongoing efforts to strengthen its financial health and prepare for future growth.
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