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V.F. Corp. Hits 52-Week High

Zacks Equity Research

Shares of V.F. Corporation (VFC) set a new 52-week high of $169.97 on Monday, Apr 8, 2013 based on the company’s consistent positive earnings surprise trend, strong organic revenue growth, impressive management guidance and strategies to expand its global reach.

This home improvement retailer closed trade at its yearly high on Apr 8, up 0.5% from the previous day’s session and recording a year-to-date return of 13.0%. Average volume of shares traded over the last 3 months stands at approximately 811K.

Moreover, the company currently trades at a forward P/E of 15.7x, a 8.3% premium to the industry average of 14.5x.

If we look at the company’s earnings surprise history, this Zacks Rank #3 (Hold) stock has outperformed the Zacks Consensus Estimate in the past 13 quarters. The average positive surprise in the trailing 13 quarters comes to 10.3%.

V.F. Corp.'s diversified brand portfolio as well as its approach to brand management, which remains focused on further developing its brands, positions the company well above its peers. We believe that given the strength of many of its brands and opportunities with regard to distribution, the company is set for significant long-term growth.

In Feb 2013, V.F. Corp. reported robust fourth quarter 2012 earnings results primarily driven by strong top-line growth along with improved margins. The fourth quarter 2012 earnings of $3.07 per share exhibited an improvement of over 32% from the comparable year-ago quarter as well as the Zacks Consensus Estimate of $3.03.

V.F. Corp’s total sales grew 4% to $3.003 billion in the quarter but fell short of the Zacks Consensus Estimate of $3.072 billion.

Given the solid fourth-quarter results, the company expects 2013 revenue to increase 6% to $11.5 billion. Gross and operating margins are anticipated to expand by 100 basis points.

Based on these forecasts, V.F. Corp. expects its adjusted earnings for 2013 to be $10.70 per share compared with $9.63 in 2012. Currently, the Zacks Consensus Estimate stands at $10.81 per share, which is substantially above the company’s guidance.

Apart from strong fourth quarter results, V.F. Corp.’s growth story looks compelling. We believe that the company’s sustained focus on strategic acquisitions, along with expanding global operations, bodes well for future growth.

Besides V.F. Corp., companies such as Best Buy Co. Inc. (BBY), Macy’s Inc. (M) and Fifth & Pacific Companies Inc. (FNP) achieved new 52-week highs of $26.29, $44.24 and $21.18, respectively, on Monday, Apr 8.

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