Why VF Corporation Stock Has a Downside of 4%

VFC stock is currently trading at $56.44, which is ~17.0% below its 52-week high price.

Sonya Bells - Author

Apr. 24 2017, Updated 10:38 a.m. ET


Analyst ratings for VFC compared to its peers

In this part of the series, we’ll look at Wall Street’s recommendations and current valuations for VF Corporation (VFC). VFC is covered by 23 Wall Street analysts, who have a neutral view on the company. It’s jointly rated 2.7 on a scale of 1.0 for “strong buy” and 5.0 for “sell.”

The company has a better rating than peers Ralph Lauren (RL), Gap (GPS), and Michael Kors (KORS), which are rated 3.1, 3.1, and 3.0, respectively. However, Hanesbrands (HBI) and PVH (PVH) have received better ratings of 1.9 and 2.2, respectively.

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What can we expect from VFC stock?

VFC stock is currently trading at $56.44, which is ~17.0% below its 52-week high. Wall Street analysts have assigned an average price target of $54.36 for the company, which indicates a fall of ~4.0% over the next 12 months. Individual target prices for the company range from $47–$71.

Stock prices for Ralph Lauren and Gap are also expected to fall 2.0% and 1.0%, respectively, according to analysts’ target prices.

PVH and Hanesbrands have upsides of 12.0% and 18.0%, respectively, over the next 12 months.

Wall Street recommendations

Of the 23 analysts covering VFC stock, 26.0% have recommended a “buy,” 65.0% have recommended a “hold,” and 9.0% have recommended a “sell.” In comparison, 73.0% of analysts have suggested a “buy” for HBI, and 65.0% have recommended a “buy” for PVH.

Comparing VFC’s valuation to its peers

VFC is currently trading at a one-year forward PE (price to earnings) ratio of 18.5x, which puts it closer to the upper end of its 52-week PE range of 14.9x–20.1x. It trades at a premium to PVH (PVH), Gap (GPS), and Hanesbrands (HBI), which are trading at 13.7x, 12.8x, and 11.2x, respectively.

If you want exposure to VFC, you can consider the PowerShares High Yield Equity Dividend Achievers ETF (PEY), which invests 1.8% of its portfolio in VFC.


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