V.F. Corp Closes at All-Time High - Analyst Blog
December 23 2013 - 10:50AM
Zacks
Shares of V.F. Corporation (VFC) touched a new
52-week high of $245.79 at the close of trade on Dec 20, 2013,
beating its previous high of $238.25 attained on Dec 2. The shares
of this Zacks Rank #3 (Hold) company have been gaining momentum,
driven by the company’s sustained focus on geographic expansion, a
disciplined capital strategy and effective implementation of
long-term growth strategies. Further, V.F. Corp.’s consistently
positive earnings surprise trend, robust organic revenue growth and
strong guidance instills confidence in the stock.
This year, shares of VF Corp. have amassed a year-to-date return of
63.5%. Average volume of shares traded over the last three months
was approximately 587.4K. Moreover, the company currently trades at
a forward P/E of 22.4x, a 22.4% premium to the peer group average
of 18.3x.
V.F. Corporation’s diversified brand portfolio positions the
company well above its peers to generate above-average industry
growth and sustain itself in the current challenging environment.
Moreover, the company is aggressively seeking to expand its
international operations, particularly in Asia Pacific, which is
one of the fastest growing regions. In China, the company plans to
increase its store count to 6,000 over a period of 5 years from
approximately 2,300 stores at present.
Going forward, V.F Corporation expects to increase its
international operations contribution toward total revenue to 38%
in 2013 and 43% by 2017. We believe that the company’s sustained
focus on expanding its international operation will boost its top
line in the long run, while reducing the risk of operating in a
single market.
V.F. Corporation has always maintained a disciplined capital
allocation strategy, focused on making investments to develop its
business, while using the excess cash to enhance shareholder
returns through dividend payouts and share buybacks. The company’s
strong cash generation ability enables it to reduce long-term debts
and return cash to shareholders.
The company’s sound capital position was evident from its recently
approved four-for-one stock split and a 21% hike in quarterly
cash dividend to $1.05 per share, both of which were payable on Dec
20.
With promising top-line growth and margin expansion, V.F.
Corporation appears to be an attractive option for investors in the
near future. The company has surpassed the Zacks Consensus Estimate
for the past 16 consecutive quarters and is expected to continue
with its upbeat performance, going forward.
Management’s impressive guidance for 2013 enhances the company’s
growth prospects. V.F. Corporation reiterated its adjusted earnings
guidance for 2013 at $10.85 per share, based on anticipated revenue
growth of 6% and gross margin expansion of nearly 150 basis points
(bps).
Apart from V.F. Corp, other stocks such as The Walt Disney
Company (DIS), Foot Locker Inc. (FL) and
Under Armour Inc. (UA) achieved new 52-week highs
of $73.56, $41.12 and $87.92, respectively, on Dec 20, 2013.
DISNEY WALT (DIS): Free Stock Analysis Report
FOOT LOCKER INC (FL): Free Stock Analysis Report
UNDER ARMOUR-A (UA): Free Stock Analysis Report
V F CORP (VFC): Free Stock Analysis Report
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