Bullish indicating open at $55-$60, IPO prices at $37
On Wednesday, BMO Capital Markets updated its outlook on VF Corp (NYSE:VFC), the apparel and footwear company, increasing its price target to $14 from $13. The firm maintained its Market Perform rating on the stock despite VF Corp's recent financial performance, which included a top and bottom line beat.
VF Corp recently reported a smaller-than-expected adjusted loss per share of $0.33. The company's sales and gross margin (GM) outperformed initial forecasts, attributed to clean inventory management. BMO Capital's commentary highlighted that while VF Corp's management is confident about the company's improving trajectory, they also acknowledge that there is considerable room for further improvement.
The analyst from BMO Capital indicated that VF Corp's ability to generate cash to pay down debt was a positive development, particularly following the sale of the Supreme brand. The removal of this financial overhang was seen as a crucial step for the company. However, for VF Corp's stock to experience further growth, the analyst noted the necessity for a turnaround in the performance of its Vans and The North Face (TNF) brands.
The new price target of $14 is based on approximately 15 times the projected earnings for the fiscal year 2026. VF Corp's management has expressed a level of comfort with the company's current direction, while also recognizing the challenges that lie ahead in revitalizing some of its core brands.
In other recent news, VF Corporation (NYSE:VFC) has shared notable updates. The company reported a further $50 million in cost savings in the first quarter of fiscal year 2025, along with plans to divest its Supreme brand for $1.5 billion. This move is intended to focus on VF Corporation's core business and enhance leverage, despite facing declines in its Americas platform and key brands like Vans and The North Face.
Moreover, VF Corporation is proactively reviewing its portfolio for potential additional asset sales, expressing confidence in returning to top-line growth. The company also anticipates modest revenue improvements in the second quarter, with a focus on cost reduction and profitability enhancement.
In the pipeline, VF Corporation has plans for a two-part investor event in October to discuss its long-term strategy. These developments follow the company's ongoing commitment to managing current market challenges while preparing for future growth opportunities.
InvestingPro Insights
As VF Corp (NYSE:VFC) navigates its path to recovery, real-time data and insights from InvestingPro can provide a clearer picture of the company's financial health and future prospects. According to InvestingPro, VF Corp is currently trading with a market capitalization of approximately $6.98 billion. Despite recent challenges, the company has a strong track record of maintaining dividend payments, with an impressive history of 54 consecutive years of dividends, indicating a commitment to shareholder returns.
InvestingPro data also shows a notable improvement in VF Corp's stock performance with a robust return over the last month of 26.95% and over the last three months of 30.62%. This could signal growing investor confidence in the company's turnaround efforts. Moreover, analysts predict that VF Corp will be profitable this year, a sentiment that aligns with the management's positive outlook on the company's trajectory.
For investors looking for deeper insights, InvestingPro offers additional tips, including an analysis of the company's high Price / Book multiple, which currently stands at 4.61, and a look into the expected growth in net income this year. There are a total of 8 InvestingPro Tips available for VF Corp, which can be found at InvestingPro for those seeking to make an informed investment decision.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.