UBS Cuts Price Target on V.F. Corp. (VFC) to $59; Reiterates Buy
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UBS maintained a Buy rating on VF Corp. (NYSE: VFC), and cut the price target to $59.00 (from $65.00), following the company's 3Q earnings report. UBS cut 4Q EPS estimates to $1.01 from $1.14. At its 1Q17 Analyst Day, UBS expects VFC will lower its +8% LT revenue growth target.
Analyst Michael Binetti commented, "We were disappointed to see bellwether VFC's 3Q revs decline -1% YOY ex-FX (UBSe: +4%). In particular, we were surprised by Jeans weakness (-4.4% ex-FX amid hot Sept weather, UBSe: +4% ex-FX) and North Face (flat ex-FX, UBSe: +LSD). DTC revs (ex-FX) up +6% YOY in 3Q despite ~8% store count growth suggest SSS could be negative. That said, while sluggish Vans reads have been a worry, Vans revs increased +8% YOY. Timberland accelerated to -1% ex-FX vs -7% in 2Q. GM was better-than-expected at +63bp YOY (UBSe: +50bp) due to VFC restricting inventory into the retail channel. VFC lowered '16 rev guidance to +2% from +3-4%, and EPS to $3.13 from $3.20."
Shares of VF Corp. closed at $53.07 yesterday.
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