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VF Corp. Upgraded On Strength In Vans Brand, Consumer Momentum

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VF Corp. Upgraded On Strength In Vans Brand, Consumer Momentum
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V.F. Corporation (NYSE: VFC)'s steady momentum continues to make the stock a bullish favorite among sell-side analysts. 

The Analyst

Bank of America Merrill Lynch analyst Robert F. Ohmes upgraded VF Corp. from Underperform to a Buy rating and raised the price target from $65 to $96. 

The Thesis

The Vans movement is gaining strong momentum, Ohmes said in a Friday upgrade note. (See the analyst's track record here.) 

While the back-to-school demographic is generally profitable for most retailers, Ohmes said that's not the only explanation. 

“We believe the Vans momentum is broad-based (every channel in every region grew more than 20 percentast quarter). We believe the strong growth extends across both wholesale and DTC as key retailers,” the analyst said. 

The web spectrum looks promising as well, with reported U.S. web traffic to Vans.com up 130 percent in May.

VF Corp. brands like Wrangler, North Face and Timberland have also performed well of late, Ohmes said. He attributes this directly to the momentum of U.S. consumers.

“U.S. manufacturing jobs increased 2.3 percent in June, the largest increase since 1995, while spending for low-income consumers continues to accelerate." 

The North Face brand is showing good momentum thanks to better inventory levels for outdoor apparel, Ohmes said. Timberland is adequately driven by hiking boot sales, he said. 

The action and outdoor sports sector combined with Vans' brand recognition should prove beneficial for VF Corp.’s future performance, according to BofA. 

Price Action

V.F. Corp. shares were trading up 1.27 percent at $84.78 at the time of publication Friday. 

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Photo by Pedro Ribeiro Simoes/Wikimedia. 

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: Bank of America Merrill Lynch Robert Ohmes TimberlandAnalyst Color Upgrades Price Target Analyst Ratings General Best of Benzinga

 

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