On Thursday, VF Corp (NYSE:VFC), known for its popular brands Vans and The North Face, received a share price target increase from Telsey Advisory Group. The firm raised its target to $15.00 from the previous $13.00 while maintaining a Market Perform rating on the stock.
VF Corp has experienced consecutive quarterly earnings misses, which led to the company withdrawing its financial outlook in late October. The introduction of the Reinvent transformation plan by newly appointed CEO Bracken Darrell was intended to address these challenges. Despite the plan's initiation, VF Corp's largest brands have continued to struggle, contributing to overall revenue declines and margin erosion.
The company also completed its strategic portfolio review, which included decisions regarding the brand Supreme. The focus for the near future is on cost-saving measures and balance sheet improvements as the CEO completes his first year and finalizes his management team.
Although the analyst at Telsey expressed concerns regarding VF Corp's ability to enhance performance amidst a tough economic environment, the decision to raise the price target was influenced by the initial steps taken under the Reinvent plan.
The new target is based on a 14.7x multiple applied to the two-year forward earnings per share estimate of $1.02. This is in relation to the current next twelve months (NTM) multiple of 16.4x and a three-year average of 13.4x.
In other recent news, VF Corp has been the subject of several significant developments. Citi has upgraded VF Corp from Neutral to Buy, following the sale of the Supreme brand for $1.5 billion, a move that exceeded expectations. This sale is expected to help the company address its upcoming debt obligations, and has led to a raised price target of $20.
Stifel has also maintained a buy rating on VF Corp, with a steady price target of $19, expressing confidence in the potential of the Vans brand under new leadership. The company's recent leadership changes include the appointment of Caroline Brown as the Global Brand President of The North Face, and Michelle (Sun) Choe as the Global Brand President of Vans.
These appointments, as part of an ongoing board refreshment process, have been viewed positively by analysts. In particular, BTIG sees Choe's appointment as a positive development for the Vans brand. These recent developments highlight VF Corp's strategic efforts to drive growth and improve its financial performance.
InvestingPro Insights
As VF Corp (NYSE:VFC) navigates through its transformation with the Reinvent plan, real-time metrics and insights from InvestingPro shed light on the company's financial health and stock performance. With a market capitalization of $6.28 billion and a negative P/E ratio reflecting the company's recent challenges, VF Corp's financial landscape is complex. The adjusted P/E ratio for the last twelve months as of Q4 2023 stands at -13.75, further emphasizing the earnings difficulties the company faces. Despite this, VF Corp has demonstrated a strong return over the last three months, with a price total return of 28.32%, signaling investor optimism in the company's recovery potential.
InvestingPro Tips highlight that VF Corp has maintained its dividend payments for 54 consecutive years, showcasing a commitment to shareholder returns even during tough times. Moreover, analysts predict the company will be profitable this year, which, if realized, could offer a path to renewed investor confidence. It's worth noting that while the stock price movements have been volatile, the recent performance indicates a significant uptick.
For investors seeking a more in-depth analysis, there are additional InvestingPro Tips available, which could provide further clarity on VF Corp's outlook. Use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription for access to these valuable insights.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.