VF Corp (NYSE: VFC) has been in a downtrend since the start of the new year but a Goldman Sachs analyst is convinced that it could recover much of its recent loss in the coming months.
VF Corp stock has upside to $27 a share
Brooke Roach double upgraded the clothing company this morning to “buy” and said its shares could climb all the way back to $27 – a near 25% upside on their previous close.
The analyst cited cost controls and improved inventory management for her bullish view on VF Corp stock.
VF Corp’s revenue and earnings trajectory has underperformed the market, but we believe the stock is nearing an inflection point with the balance of catalysts for the stock now weighted to the upside.
The stock market news arrives a month before the apparel and footwear company is set to report its quarterly results. Consensus is for it to earn 14 cents a share versus 45 cents per share a year ago.
VF Corp stock will benefit from China
VF Corp is committed to lowering its debt that could also be a tailwind for its share price. Roach expects the Denver-headquartered firm to benefit as China continues to come back online as well. Her research note reads:
Looking ahead, we believe strategic initiatives now in place to improve execution will drive relative outperformance in the stock.
VF Corp is currently operating under the interim CEO Benno Dorer and the Goldman Sachs analyst is confident that the firm has a pool of reputable candidates to permanently fill that position.
Production innovation particularly at “Vans” was among other reasons why she’s constructive on the VF Corp stock.
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