Barclays analyst Adrienne Yih has upgraded V.F. Corporation (VFC) from Equal-Weight to Overweight, raising the price target from $19 to $22. This upgrade signals a bullish outlook for the company, with the analyst anticipating a gradual yet significant turnaround in VFC’s performance over the next few quarters.
Yih expects VFC to experience modest improvements starting in the fall of 2024, ultimately leading to margin expansion and sustainable positive sales growth. She notes that early signs of product and brand improvements could signal the beginning of a multi-year transformation for the company’s brand portfolio, which includes iconic names like Vans, The North Face, and Timberland.
While near-term uncertainty remains, Yih expresses optimism about the sequential sales growth at Vans and the anticipated gross margin exceeding expectations in the first quarter of 2025, despite margin pressures from efforts to optimize the product and brand portfolio. She emphasizes that VFC is taking foundational steps to stabilize and revitalize the business.
These efforts include reducing debt to enhance operational flexibility, and the recent leadership hires are expected to have a significant impact on the business within six to twelve months. Yih has also updated her earnings per share (EPS) estimates for FY25, FY26, and FY27, reflecting her confidence in the company’s future.
Following the upgrade, VFC shares rose by 5% to $19.32 in Wednesday’s trading. This positive market response suggests that investors are optimistic about the potential for a turnaround at VFC, driven by the company’s strategic initiatives and the analyst’s positive outlook.
