Stifel Nicolaus reported on Wednesday that it has raised its price target on apparel company, VF Corp (VFC).
The firm has reiterated a “Buy” rating on VFC, and has increased the company’s price target from $190 to $207. This price target suggests a 9% upside from the stock’s current price of $188.79.
An analyst from the firm commented, “yesterday, VF Corp hosted an Investor Day in NYC featuring growth objectives for 2017, an in-depth overview of long-term strategy, and discussion on key platforms and brands to drive growth. Financial objectives for 2017 include: $17.3bn in revenue (~10% CAGR) and $18.00 in EPS (~13% CAGR), driven by a 300bps increase in gross margin (49.5%) from 2012 to 2017 (management reiterated expectations for 100bps of expansion in 2013, implies 47.5%) and 250bps increase in operating margin (management reiterated expectations for 100bps of expansion in 2013, implies 14.5%). Revenue growth is expected to come from organic (8% CAGR) and acquisitions (2% CAGR). Cash flow from operations is targeted to increase to $2.4bn by 2017 from $1.3bn in 2012, and management highlighted priorities of cash as: 1) acquisitions in Outdoor & Action Sports, 2) a dividend payout ratio of 40% (implies $7.20 dividend per year in 2017), and 3) share repurchases.”
VF Corp shares were up 99 cents, or 0.53% during Wednesday morning trading. The stock is up 25% YTD.
The Bottom Line
Shares of VF Corp (VFC) have a 1.84% yield, based on Wednesday morning’s price of $189.53.
VF Corp (VFC) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.
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