- VF Corp. (VFC -2%) is lower after Deutsche Bank downgrades shares to Hold from Buy with a $76 price target, cut from $104, citing rising concerns around the global macro environment which has the firm re-evaluating companies in its universe such as VFC that have high international exposure (42% of revenues).
- While Deutsche Bank still expects trends at Vans to remain solid in Q3, it is concerned about tough comparisons going forward and sees risks to sales slowing faster than expected, especially as fashion shifts and Nike takes back market share.
- The firm also thinks growth at Timberland will be modest over the next year, North Face's reliance on strong European trends could become a headwind and margin upside is limited as cost and mix become less favorable.
- Deutsche Bank cuts its FY 2020 EPS forecast to $4.11 from $4.24 previously and $0.06 below Wall Street consensus, and believes VFC no longer warrants a premium valuation.