) touched a new 52-week high of $197.62 on Friday, Jul 5, and
eventually closed trade at $196.28. The stock has gained momentum
since the company announced its 5-year initiatives and strategies
to boost shareholder returns. This global apparel retailer has
amassed a year-to-date return of 31.9%.
Average volume of shares traded over the last 3 months was
approximately 527K. Moreover, the company currently trades at a
forward P/E of 18.06x, a 3.4% premium to the peer group average
of 17.46x. The last traded price is 0.1% below the Zacks
Consensus average analyst price target of $196.53. Additionally,
the company's long-term estimated EPS growth rate is 11.7%.
Investors became more optimistic on this Zacks Rank #3 (Hold)
stock after the company outlined its key financial targets
through 2017 at an investor meet held on Jun 11. Its announced
goals aimed at driving strong cash flow, and consequently funding
acquisitions, dividends and share repurchases.
As part of its key financial targets, V.F. Corp. expects to
increase revenues to $17.3 billion by 2017, recording a 5-year
compounded annual growth rate (CAGR) of 10% - including 8%
organic growth and 2% growth from acquisitions. Earnings per
share through 2017 are projected to reach $18.00, reflecting a
5-year CAGR of 13%.
The company now expects gross margin to jump 300 basis points
(bps) to 49.5% in 2017 from 46.5% in 2012. Operating margin for
2017 is likely to grow to 16%, rising 250 bps from 13.5% in
The growth in the company's margins will likely drive annual
cash flow from operations to $2.4 billion by 2017, with
cumulative cash flow generation of $9.5 billion from 2013 to
2017. Based on such strong cash flow projections, the company
expects a dividend payout rate of 40%, annual total shareholder
return of more than 15% and return on invested capital of 20% by
What further bolsters investors' confidence on the stock is
the company's history of positive earnings surprises. We
observe that V.F. Corp. has beaten the Zacks Consensus Estimate
in the past 10 quarters by an average of 7.5%.
V.F. Corp.'s diversified brand portfolio and its brand
management - with focus on developing its brands further -
position the company more advantageously than its peers. Given
the strength of many of its brands and the opportunities in
distribution, we believe that V.F. Corp. is well poised for
Apart from V.F. Corp., companies such as
The Gap, Inc.
Brown Shoe Co. Inc.
) achieved new 52-week highs of $43.39, $22.73 and $62.10,
respectively, on Jul 5, 2013.
BROWN SHOE CO (BWS): Free Stock Analysis
GAP INC (GPS): Free Stock Analysis Report
NORDSTROM INC (JWN): Free Stock Analysis
V F CORP (VFC): Free Stock Analysis Report
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