Analyst Tom Nikic from Needham maintained a Buy rating on VF and keeping the price target at $19.00.
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Tom Nikic has given his Buy rating due to a combination of factors that reflect positively on VF Corporation’s strategic decisions and financial health. The sale of Dickies to Bluestar Alliance for $600 million is seen as a beneficial move, as it allows VF to streamline its portfolio and address its balance sheet concerns. This transaction is expected to significantly reduce VF’s net debt by approximately 15%, thereby improving its financial leverage.
Additionally, the proceeds from the sale are anticipated to cover the company’s upcoming debt maturity, which adds a layer of financial stability. Although there are no immediate changes to the earnings estimates, adjustments have been made to account for a higher tax rate and current foreign exchange rates. These strategic financial maneuvers and adjustments in estimates underpin the confidence in VF’s ability to navigate current macroeconomic challenges, justifying the Buy rating.
In another report released today, Telsey Advisory also maintained a Buy rating on the stock with a $14.00 price target.