On Wednesday, VF Corp (NYSE:VFC) shares saw its price target increased by Evercore ISI from $14.00 to $16.00, while the firm kept its In Line rating on the stock.
The adjustment comes after VF Corp reported a stronger than expected performance in the first quarter, with significant improvements noted in several key financial metrics.
The company surpassed expectations in revenue, gross margin, EBIT, and EPS. A notable achievement highlighted was the reduction of inventory levels by 24% compared to the previous year. Additionally, VF Corp confirmed its free cash flow guidance and suggested the implementation of another cost control plan.
VF Corp's recent sale of the Supreme brand for $1.5 billion was also seen as a strategic move to strengthen its balance sheet. This sale contributes to a more positive narrative for the company, which has been working to improve its financial standing.
In anticipation of an upcoming analyst day scheduled for October 30th, which will follow the release of VF Corp's second-quarter earnings, there is an expectation that the company will present a favorable update.
The timing of the analyst day suggests that VF Corp is unlikely to announce any major brand resets, particularly concerning the health of The North Face brand, which has been a point of concern for bears.
The updated outlook by Evercore ISI indicates that it may be challenging for the bear case to gain momentum in the period leading up to the analyst day. VF Corp's recent achievements seem to offer more support for a bullish perspective in the near term.
InvestingPro Insights
VF Corp (NYSE:VFC), with its recent performance, has attracted attention from investors and analysts alike. In light of Evercore ISI's updated price target, it's worth considering some key metrics and insights from InvestingPro that could further inform investor decisions. As of the last twelve months leading up to Q1 2025, VF Corp's market capitalization stands at approximately $6.4 billion, reflecting the scale of the business in the current market climate. Despite a challenging revenue growth rate of -10.16%, VF Corp has maintained a strong gross profit margin of 51.89%, showcasing its ability to retain a substantial portion of sales as gross profit.
One of the standout InvestingPro Tips is VF Corp's high shareholder yield, which may be particularly attractive to investors looking for returns through dividends and share repurchases. Additionally, while the stock price has experienced volatility, analysts predict VF Corp will be profitable this year, which could signal a potential turnaround for the company following a period of not being profitable over the last twelve months. For investors seeking more comprehensive analysis, InvestingPro offers more tips on VF Corp at https://www.investing.com/pro/VFC, including insights into the company's dividend consistency and recent stock performance.
With VF Corp's commitment to maintaining dividend payments for over half a century, the current dividend yield stands at 2.19%, a testament to the company's dedication to returning value to shareholders. Moreover, the stock has demonstrated a strong return over the last three months, with a 30.62% total price return, suggesting a positive short-term momentum. While the company faces challenges, these insights could provide a balanced view for investors considering VF Corp's stock in their portfolios.
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