Lorraine Hutchinson, an analyst from Bank of America Securities, maintained the Sell rating on VF. The associated price target is $12.00.
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Lorraine Hutchinson’s rating is based on several factors impacting VF’s financial outlook. The sale of Dickies to Bluestar Alliance is expected to help VF focus more on its core brands like The North Face and Timberland, as well as the turnaround of Vans. However, even with the proceeds from this sale being used to reduce debt, VF’s balance sheet is anticipated to remain highly leveraged, with a net debt to EBITDA ratio of approximately 3.4x.
Additionally, while the transaction is slightly accretive to earnings, contributing to a modest increase in EPS, the declining revenue from Dickies and the infancy stage of the Vans turnaround pose significant risks. The Vans brand has experienced revenue declines, and the recovery efforts face challenges from tariffs and broader macroeconomic issues. These factors contribute to the cautious outlook and the decision to maintain a Sell rating.
According to TipRanks, Hutchinson is a 4-star analyst with an average return of 5.9% and a 53.19% success rate. Hutchinson covers the Consumer Cyclical sector, focusing on stocks such as Tapestry, Lululemon Athletica, and Gap Inc.
In another report released yesterday, Williams Trading also maintained a Sell rating on the stock with a $10.00 price target.