Wells Fargo Raises Price Valuation and Estimates on VF Corp. (VFC) Following Timberland (TBL) Acquisition Announcement

Wells Fargo is maintaining its Outperform rating on shares of VF Corp. (NYSE: VFC), but is raising its valuation range from $105-$113 to $115-$124 following the June 13, 2011 announcement to acquire Timberland (NYSE: TBL) for $43 per share.

The firm notes that the $43 price per share represents a 43 percent premium compared to were the stock closed at on Friday June 10. The deal will be financed with $500 million in cash, $700 million in commercial paper, and $800 million in term debt.

Since VFC ended Q1 with $978 million in debt and $673 million in cash; Wells now forecasts that it will end 2011 with $1.8 billion in debt and $370 million in cash.

The Street estimates that Timberland will see $1.6 billion in sales in 2011 with 75 percent being footwear and 25 percent being apparel. VFC expects to grow TBL sales at a 10% CAGR over the next several years, similar to the company's growth rate last year. Timberland's operating margin in 2010 was 9.4 percent, VFC believes that it can increase it by 600 bps over the next five years.

Wells Fargo is also raising its FY11 and FY12 EPS estimates from $7.25 and $8.10 to $7.50 and $8.85.

For more ratings news on VF Corp. click here and for the rating history of VF Corp. click here.

Shares of VF Corp. closed at $101.01 yesterday.

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• AMD (AMD) to offer senior notes in four parts
• Piper Sandler Reiterates Overweight Rating on Estee Lauder (EL), 'F4Q26 Preview'
• Powell Industries (POWL) PT Lowered to $235 at Cantor Fitzgerald