VF Corp Is A 'Compelling Turnaround Story': Analyst Explains Why

Needham analyst Tom Nikic initiated coverage on VF Corporation VFC with a price forecast of $28.

Per the analyst, the company is recovering from a difficult period that saw its earnings per share drop by about 80%.

Nikic highlights that CEO Bracken Darrell is implementing a plan to improve efficiency and margins, rejuvenate the Vans brand, and reduce debt leverage.

The analyst views VF Corporation as an attractive turnaround story, projecting FY28 EPS to exceed $2.00 (compared to pro-forma FY24 EPS of $0.64 excluding Supreme).

The stock could reach $40 within 2-3 years, leaving room for growth, especially considering its peak of around $100 before the pandemic, the analyst highlights.

Although challenges remain, the analyst highlights that the company is a “compelling turnaround story.”

Also Read: North Face Parent VF Corp’s Q3 Marks First Revenue Growth In Nine Quarters, But Goldman Sachs Stays Neutral

Nikic notes that VF Corporation previously had over $6 billion in net debt, but after selling Supreme for $1.5 billion and other non-core assets, along with better working-capital management and stabilizing fundamentals, net debt is now around $3.3 billion.

The company is expected to continue reducing debt, which will improve the profit and loss and provide more operational flexibility, the analyst adds.

Price Action: VFC shares are trading lower by 0.61% to $24.20 at last check Wednesday.

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