UPDATE: J.P. Morgan Raises PT on VF Corp on EPS Growth Story
In a report published Tuesday, J.P. Morgan analyst Matthew R. Boss reiterated an Overweight rating on VF Corp (NYSE: VFC), and raised the price target from $175.00 to $195.00.
In the report, Boss noted, “We view VFC as a core multi-year compounding mid-teens EPS growth story with a diversified brand portfolio (TNF, TBL, Vans), strong management bench, and balance sheet which provides ample flexibility (annual FCF of $1.5B+). Our recent meeting with management pointed to VFC's multi-year strategy ‘On Track' with EPS power of $14-$15 likely by FY15 on our model (~50% upside vs. FY12) given a significant International in-fill opportunity (i.e. Asia at ~9% of sales) and higher-margin DTC expansion (22% today moving to 25% w/ E-commerce only 2% of sales) representing longer-term levers. Looking ahead, potential catalysts include (1) Timberland improvement (not in our model) with a potential top-line inflection in 2014 (FY12 SKU reduction; US Men's apparel in 2H13), (2) acquisition or increased capital allocation (dividend increase likely in 2H13 as the company targets a 40% dividend payout ratio vs. 32% today), and (3) June 11 analyst day: 5-Year consolidated plan (last plan provided in FY11).”
VF Corp closed on Monday at $177.36.
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