Stock market returns versus peers’
As of October 20, 2016, VF Corporation (VFC) was trading at $54.30, ~36% below its 52-week high price. The company has fallen 12.8% YTD (year-to-date). It has underperformed the S&P 500 Apparel and Accessories Index, which has fall 1.7% YTD.
VFC, along with peers Ralph Lauren (RL), PVH (PVH), and Under Armour (UA), forms part of the S&P 500 Apparel and Accessories Index. PVH has delivered an exceptional performance this year. Its share price has risen around 50% this year. However, Ralph Lauren and Under Armour are in the red, like VFC. The two companies have fallen 12.8% and 7.8%, respectively.
What can we expect for VFC’s stock price?
Wall Street has assigned an average price target of $64.61 to VFC. This indicates a potential upside of 19% over the next 12 months. VFC has a better gain potential than branded apparel peers PVH and Ralph Lauren. The two companies have respective upside potentials of 7% and 10% over the next 12 months.
Wall Street recommendations on VFC
VFC is covered by 26 Wall Street analysts. Of these, 15 analysts have given a “buy” recommendation, nine have given a “hold” recommendation, and two have given a “sell” recommendation on the stock.
Comparing VFC’s valuation
VFC is currently trading at a one-year forward PE (price-to-earnings) ratio of 16.4x, which puts it in the middle of its 52-week PE range of 14.8x–20.0x.
The company’s current valuation is higher than that of branded apparel peers PVH (PVH), Gap (GPS), and Hanesbrands (HBI), which are trading at 15.7x, 11.8x, and 13.3x, respectively. However, it is cheaper than sportswear peers Nike (NKE), Under Armour (UA), and Columbia Sportswear (COLM), which are trading at 21.7x, 62x, and 22.2x, respectively. Investors who want exposure to VFC could consider the iShares Morningstar Large-Cap Growth ETF (JKE), which invests 0.40% of its portfolio in VFC.