VF Corp: High Potential For A Significant Brand Acquisition Is Exist, Says UBS

In a research report issued today, UBS analyst Michael Binetti maintained a Buy rating on VF Corp (NYSE:VFC) with a price target of $81.00, following the company’s analyst day.

Binetti wrote, “At its Analyst Day, VFC laid out significant detail behind a ~2-yr consumer study to define the TBL brand, its core customer, and its global addressable mkt. We est that guide for $3.1B in TBL revs in 2019 implies only a 14% wholesale-adj. share of the $36B global “Outdoor Lifestyler” market—which we believe could prove conservative given TBL’s: 1) significant opportunity in its recently re-launched apparel business (guidance assumes ~75% of incremental TBL rev to come from footwear, which implies conservative apparel targets, in our view) and 2) opportunity in women’s (which is growing fast but is only ~15% of US footwear sales today).”

The analyst added, “In our view, VFC’s stock offers a unique combination of: 1) best in big cap apparel organic growth (new TBL guidance implies corp rev growth could reach +9% in ’15 with visible margin opportunities through accelerating favorable business mix, -25% lower cotton costs); and 2) high potential for a significant brand acquisition (with debt/EBITDA now below TBL acquisition levels).”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Michael Binetti has a total average return of 21.8% and a 91.7% success rate. Binetti has a 21.1% average return when recommending VFC, and is ranked #135 out of 3286 analysts.

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