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VF shares drop on analyst downgrade
Shares of VF Corp. (NYSE: VFC) fell on Sept. 22, after an analyst said the apparel maker is facing a tough environment and downgraded the stock. VF is parent of various outdoor brands, including The North Face, JanSport, Eastpak and Eagle Creek.
Lazard Capital Markets analyst Todd Slater said in a note to investors that at the beginning of the year the company was undervalued, as it went through a management change and Eric Wiseman, previously president and chief operating officer, became CEO on Jan. 1.
“VF was not getting credit deserved for its management talent pool, its penetration into the trending contemporary market, its international diversification, and its more assertive posture on building out retail, moves that each carried the promise of accelerated revenue growth and higher margins,” Slater wrote.
However, since the beginning of the year the stock has risen 20 percent, amid a weakening U.S. economy, higher sourcing costs, and less foreign exchange benefit as the dollar strengthens.
“We believe it is prescient to take some chips off the table and wait for a more attractive entry point,” Slater wrote.
He cut his rating to “Hold” from “Buy,” but added that the company is a “best-of-breed” branded apparel operator with many long-term catalysts for its stock price.
Shares fell $3.48, or 4.2 percent, to close at $78.81. The stock has traded between $63.68 and $87.36 during the past 52 weeks.
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