Apparel Company VF's Fortune Will Not Turn For The Better, Says Analyst

Wedbush analyst Tom Nikic reiterated a Neutral rating on the shares of VF Corp VFC and lowered the price target from $15.50 to $13.

The company is slated to report fourth-quarter FY24 earnings on May 22.

The analyst is lowering EPS forecasts and price target, as the checks suggest that business trends remain challenged at VFC.

The analyst slashed FY24-26 EPS forecasts to $0.98/$1.15/$1.46 (vs. $1.02/ $1.46/$1.82 prior).

Vans has been the biggest issue for the company, and the analyst hasn’t seen anything to suggest trends are improving.

The analyst noted that for both The North Face (TNF) and Vans, e-commerce site traffic appears to be down Y/Y, as are global Google searches for the brands. 

Given the company’s highly-levered balance sheet (nearly 5x net leverage as of third quarter), the stock reaction this week could potentially hinge on non-P&L factors, said the analyst.

Looking at a variety of data, the analyst continues to see pressure on VFC’s major brands.

Despite the ongoing travails of the company, the analyst concedes that sentiment is currently so low on the name that it’s hard to envision much more downside from here.

Overall, the analyst doesn’t see reasons to consider that the business is turning for the better right now.

Price Action: VFC shares are trading higher by 0.08% at $12.33 at the last check Tuesday.

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