VF Corp Beats Earnings Estimates as BNP Paribas Raises Price Target to $16
Key Facts
BNP Paribas Exane raised its rating on VF Corp from "Underperform" to "Neutral" and lifted its price target from $13 to $16, citing progress in the apparel and footwear company’s turnaround plan. Investing.com reported the upgrade on October 29, a day after the company announced its fiscal 2027 second-quarter results. VF beat analysts’ estimates for earnings and revenue, but its shares fell in premarket trading after the results were released. The stock dropped 3.82% to $16.38, compared with the previous close of $17.03, according to an Investing.com report published on October 28. The company’s news therefore combined better-than-expected operating indicators with pressure on the shares, while BNP Paribas’ new "Neutral" rating came with a price target below the cited premarket price.
Adjusted earnings per share were $0.70 in the second quarter, above analysts’ estimate of $0.53, while revenue was $2.7 billion versus the expected $2.66 billion, according to Investing.com. But VF’s detailed reported figures showed revenue of $2.6951 billion, compared with $2.8027 billion in the same period of the previous fiscal year, a 4% year-over-year decline. This reflects the difference between beating analysts’ estimates and revenue performance compared with the prior year; a beat does not mean sales have returned to growth. The company also reported adjusted operating income, excluding Dickies, of about $364 million, above its prior guidance of about $315 million. Gross margin rose to 55.4%, up 320 basis points from the year-ago period, according to the company’s statement.
In explaining the upgrade, BNP Paribas Exane said progress in VF’s turnaround efforts was the reason for raising its rating. It added that a meeting with the company’s management gave it greater clarity on sales and margin estimates. The price-target increase from $13 to $16 indicates a specific reassessment of the stock’s valuation, while the rating remained "Neutral" after previously being "Underperform." The company did not say in its results statement that the upgrade reflected a broad shift in analysts’ assessment; the firm that issued it linked the move to progress on VF’s plan and information from its meeting with management. The assessment came as investors weighed improved earnings and margins against the year-over-year revenue decline.
Performance among the main brands varied in the quarter: Vans revenue fell 9.8% year over year, while revenue at both The North Face and Timberland rose 4%. The CEO said growth at The North Face and Timberland, alongside an increase of more than 40% in Altra sales, was tied to products, innovation and brand storytelling. He also pointed to global Vans direct-to-consumer sales returning to growth for the first time in about five years. This divergence places brand performance within a results picture that beat earnings estimates but did not prevent a continued annual decline in group revenue. Net debt also fell by $1.1 billion, or 20%, compared with the same period a year earlier, according to VF’s statement.
VF reaffirmed its fiscal 2027 guidance, expecting revenue growth of 2% or more in constant currency and an adjusted operating margin of about 8%. The guidance sets a benchmark for assessing whether improved margins and operating results will be accompanied by a return to revenue growth, given the year-over-year decline recorded in the second quarter. The company also said its board approved a quarterly cash dividend of $0.09 per share. The dividend will be paid on December 17, 2026, to shareholders of record on December 10. These guidance targets and dates remain the nearest specified milestones in the company’s announcement following the quarterly results.