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It’s time to consider shares of VF Corp . after its recent dividend cut, according to Stifel. Analyst Jim Duffy upgraded VF Corp. shares to buy from hold, saying the stock looks compelling after investors sold it in the wake of a dividend cut. The company behind Vans and The North Face has grown its dividend for 49 years, which means it’s often held by exchange traded funds as a dividend aristocrat, according to the note. “The dividend cut and resulting dislocation in shares present an attractive entry point and we recommend capitalizing on elevated volume to build positions. We view the new look 4.6% dividend yield as safe (mid-50% payout) and foresee a flush of cash flow (forward 5 quarter projection $2-2.5bn, > 20% yield to the equity) accruing to the equity value,” Duffy wrote. The analyst reiterated a 12-month price target of $30, meaning shares could rise about 15% from Thursday’s close. VF shares added 1.8% in Friday premarket trading. The stock has declined for three straight calendar years. It tumbled 60% in 2022, 12% in 2021, and more than 11% in 2020. This year, the trend has continued, with shares falling more than 5% in 2023. VFC 5Y mountain VF Corp shares have been on the decline for the past three years. But VF beat expectations on the top and bottom lines in its fiscal third-quarter earnings report this week, according to consensus estimates on FactSet. “With resulting deleverage, the dividend yield, and a potential earnings boost from fundamental improvement (baseline FY25E EPS = $3.00), a rerating to mid-teens P/E suggests opportunity for 75%+ upside within 12 mos,” Duffy wrote. “Visibility to fundamental inflection is challenged but we have a favorable view the brand portfolio, operational competencies, and organizational culture. We view the risk reward favorable at these levels,” he added. —CNBC’s Michael Bloom contributed to this report.
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