VF, the Consumer Cyclical sector company, was revisited by a Wall Street analyst yesterday. Analyst Sam Poser from Williams Trading maintained a Sell rating on the stock and has a $10.00 price target.
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Sam Poser has given his Sell rating due to a combination of factors affecting VF Corporation’s future performance. The decision to sell Dickies to Blue Star Alliance is expected to impact VF’s overall revenue, and while The North Face remains a strong brand, its growth projections seem overly optimistic. The anticipated doubling of revenue for The North Face, as presented at the Investor Day, appears unlikely to be achieved in the near term. Additionally, attempts to boost The North Face sales might be at the expense of its long-term brand value, especially given the current struggles of the Vans brand, which shows little sign of a turnaround.
Furthermore, Timberland’s sales, although currently strong, are at risk of declining due to the cyclical nature of its iconic yellow boot sales. The ambitious financial targets set for FY28, including a significant increase in gross margin and operating margin, seem unattainable given the current performance of VF’s key brands. The last time VF achieved a 55% gross margin was in FY20, under very different market conditions. With Vans underperforming and The North Face not showing significant momentum, achieving these targets appears unlikely.