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VF Corp Acquisition Strategy Appears To Be Paying Off, Deutsche Bank Says

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VF Corp Acquisition Strategy Appears To Be Paying Off, Deutsche Bank Says
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VF Corp (NYSE: VFC) acquisition strategy appears to be paying off, following a new analyst initiation report.

The Analyst

Deutsche Bank analyst Paul Trussell initiated coverage with a Buy rating and a $93 price target.

The Thesis

Trussell outlined five reasons behind his bullish stance on VF Corp.

The analyst says VF Corp has healthy channel checks and has the potential for beat and raises in the upcoming quarter. Trussell also says the company’s acquisition of Williamson-Dickie, which closed in late 2017 for $820 million, adds to the company’s already diversified portfolio and has the opportunity to double the brand’s EBIT margin over the next few years.

VF Corp's high penetration in the outdoor and action sports, which the analyst says is a preferred category, will help the company continue to outperform he says. According to NPD data, the U.S. outdoor industry sales amounted to $18.9 billion in sales in the 12 months that ended in April.

Trussell says VF Corp has a long runway ahead in operating margin gains, due to continuing GPM expansion and an upcoming inflection point in SG&A leverage. He continues to favor VF Corp for its industry leading shareholder returns and supportive balance sheet.

Price Action

VF Corp shares closed up marginally at $83.70.

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Latest Ratings for VFC

DateFirmActionFromTo
Jul 2018RBC CapitalInitiates Coverage OnOutperform
Jul 2018BuckinghamMaintainsNeutralNeutral
Jul 2018Credit SuisseMaintainsOutperformOutperform

View More Analyst Ratings for VFC
View the Latest Analyst Ratings

Posted-In: Deutsche Bank Paul TrussellAnalyst Color Price Target Initiation Analyst Ratings Best of Benzinga

 

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