How VFC’s Valuation Compares with Peers

On October 12, VF Corporation’s (VFC) 12-month forward PE (price-to-earnings) ratio was 22.4x.

Victoria Dean - Author

Oct. 16 2018, Updated 7:32 a.m. ET


Forward PE ratios

On October 12, VF Corporation’s (VFC) 12-month forward PE (price-to-earnings) ratio was 22.4x. Hanesbrands (HBI), PVH Corp. (PVH), Michael Kors (KORS), and Ralph Lauren (RL) have PE ratios of 8.8x, 12.6x, 12.2x, and 17.4x, respectively.

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Growth projections

Wall Street analysts project VFC’s revenue to increase by 11.0% to $13.7 billion in fiscal 2019 and its adjusted EPS to increase by 15.9% to $3.65.

VF is making several investments in enhancing its international operations and D2C (direct-to-customer) businesses. Acquisitions and inherent strength in brands like Vans and The North Face continue to drive the top line. For Vans, VFC expects revenue to surpass the $5 billion mark by 2023. However, the company has sold Reef and Nautica brands as part of portfolio reorganization. Nonetheless, rising costs continue to be a concern.

Projections for peers’ top and bottom lines

In fiscal 2019, analysts expect Michael Kors’ sales to rise by 8.9% to $5.1 billion and its EPS to grow 11.4% to $5.03. During the same period, analysts expect Ralph Lauren’s top line to decrease marginally to $6.2 billion and its EPS to grow by 10.6% to $6.67. In fiscal 2018, analysts expect Hanesbrands’ revenue to increase by 4.6% to $6.8 billion in 2018 and its adjusted EPS to decline by 9.4% to $1.75. Analysts expect PVH’s top line to increase by 7.6% to $9.6 billion in fiscal 2018 and its adjusted EPS to rise by 16.8% to $9.28.

A look at dividend yields

Despite extensive investments, VF Corp is committed to paying dividends to its stockholders. The company’s annualized dividend stands at $1.84. VF’s dividend yield was 2.1% based on its October 12 closing price of $87.43. The dividend yields of Hanesbrands, PVH Corp, and Ralph Lauren stood at 3.7%, 0.1%, and 2.1%, respectively, on October 12. Michael Kors doesn’t pay dividends.


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