Analysts Applaud TBL Strategy

Analysts praised Timberland’s new direction and said the $3.1 billion sales target parent company VF Corp. set for 2019 at the brand’s recent investor day should be an achievable one.

“We believe the new targets appear reasonable against a clear plan for geographic expansion, increased penetration and product extensions,” Christopher Svezia, an analyst with Susquehanna Financial, wrote in a note following the event hosted at Timberland’s Stratham, N.H., headquarters on Wednesday. “With VFC’s largest and most complex acquisition bearing upside, ‘bigger picture’ fiscal year 2017 targets appear within reach, with the event supporting the potential gross margin and M&A upside.”

Svezia, who holds a positive rating on VFC stock, raised the price target for the stock to $76 from $72. “Our checks with large retailers gives us confidence in this trajectory given the stronger product while marketing and the go-to-market strategy is better than before,” he said.

Mitch Kummetz, an analyst with Robert W. Baird and Co., also raised the price target to $73 from $72, and lauded the company’s plans to continue focusing on the outdoor lifestyle consumer while delivering what the brand calls “SPG,” or “style, performance and green.”

“Now that the vision of the brand has been reset, Timberland is gaining momentum again and appears poised for continued sales growth and further profitability improvement,” he wrote in a note to investors.

Overall performance at VF Corp. should continue to show strength, analyst Kate McShane of Citibank wrote in a note. McShane targets $71 for VFC stock.

“We like that VFC continues to execute on its targets … with faster growth in outdoor/action sports, direct-to-consumer and international offsetting current challenges in jeanswear and the mid-tier/mass,” she said. “Based on our incoming calls from clients, M&A activity by VFC will likely carry more weight than any other catalyst. We reiterate our Buy rating on the stock.”

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