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Wall Street Maintains Recommendations after VFC’s 1Q17 Results

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Wall Street’s recommendations for VFC

VF Corporation (VFC) is covered by 22 Wall Street analysts, who have a neutral view of the company. It has a rating of 2.7 on a scale of 1 for “strong buy” and 5 for “sell.”

In comparison, apparel peers Ralph Lauren (RL), Gap (GPS), and Michael Kors (KORS) are rated 3.1, 3.1, and 3.0, respectively. Hanesbrands (HBI) and PVH (PVH) have better ratings than VFC with ratings of 1.9 and 2.2, respectively.

About 27.0% of the analysts covering VFC recommend a “buy” for the stock. About 64.0% recommend a “hold,” and 6.0% recommend a “sell.” In comparison, 71.0% of analysts recommend a “buy” for Hanesbrands, and 36.0% recommend a “buy” for PVH.

There have been no ratings changes for VFC after its first-quarter results. As we’ve seen in this series, the company had mixed 1Q17 results, missing the top-line estimate but posting in-line earnings.

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Target price

VFC is trading at $52.92, which is ~25.0% below its 52-week high. Wall Street has assigned an average price target of $54.43 for the company, which indicates a potential upside of about 3.0% over the next 12 months.

PVH, HBI, and Coach have upside potentials of 12.0%, 19.0%, and 11.0%, respectively.

Valuations

VFC is trading at a one-year forward PE (price-to-earnings) ratio of 17.8x compared to its three-year average of 20.0x. It continues to trade at a premium to PVH, Hanesbrands, and Gap, which are trading at 13.5x, 11.0x, and 13.0x, respectively.

If you want exposure to VFC, you could consider the VanEck Vectors Morningstar Wide Moat ETF (MOAT), which invests 2.0% of its portfolio in VFC.

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