Stifel Upgrades Vans, Timberland Owner VF Corp. Before Q4 Report

VF Corp VFC’s bundling frigid fans at the Pyeongchang Olympics, and the outfitter scored a win of its own Monday. 

The Rating

Stifel Nicolaus analyst Jim Duffy upgraded VF Corp to Buy and raised his price target from $78 to $91.

The Thesis

The 14-percent upside reflects strength in U.S. wholesale, Europe and direct-to-consumer sales, as well as environmental factors and modest growth in the forex market, Duffy said. 

“While our estimates are ahead of consensus, we believe a number of our fiscal 2019 model inputs are conservative,” Duffy said, anticipating a price target increase during the year.

“Channel inventories are healthy exiting holiday, U.S. consumer sentiment and discretionary spending power are benefiting from tax reform and FX has emerged as a meaningful tailwind," the analyst said. 

Strength in the Vans segment coupled with purchases of Williamson Dickie and Icebreaker set the firm ahead of schedule on its five-year, 5-7-percent compound annual growth objective. 

Reinvestments in the brands are seen to temper immediate upside but ultimately build long-term momentum, Duffy said. 

VF Corp. reports fourth-quarter earnings before the open Friday, Feb. 16. 

Price Action

At the time of publication, shares were trading up 2.04 percent at $80.91. 

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