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Is it safe to buy V.F. Corp stock as it misses FQ2 revenue and earnings estimates?

on Oct 22, 2021
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  • V.F. Corp shares on Friday declined after announcing its most recent quarterly results.
  • The company reported its fiscal Q2 results before markets opened, missing analyst expectations.
  • However, VFC marginally raised its quarterly dividend to $0.50, implying a forward yield of 2.7%.

On Friday, V.F. Corp (NYSE:VFC) shares declined after releasing its most recent quarterly results. The company announced its fiscal Q2 revenue and earnings before markets opened, missing analyst expectations. However, VFC raised marginally raised its quarterly dividend to $0.50 per share from $0.49, implying an exciting forward yield of 2.7%.

The apparel and footwear manufacturer posted FQ2 non-GAAP earnings per share of $1.11, slightly missing the consensus Street estimate of $1.15. 

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On the other hand, its GAAP EPS of $1.18 outperformed estimates by $0.04, while revenue for the quarter of $3.19 billion came in $291 million below estimates, despite growing by 22.2% from the same quarter a year ago.

Time to bet on VFC’s growth potential?

From an investment perspective, V.F. Corp shares trade at a reasonable forward P/E ratio of 19.68, making the stock potentially attractive to value investors.

On the other hand, although analysts expect its earnings per share to fall by more than 32% this year, they also forecast average annual growth of nearly 48% for the next five years.

Therefore, although the stock may experience short-term turbulence in the short-term amid the earnings decline, it could be a compelling opportunity for long-term growth investors.

Source – TradingView

Technically, VFC shares seem to have recently plunged to complete a downward breakout from an ascending channel formation. As a result, the stock avoided entering into the overbought conditions of the 14-day RSI.

Therefore, with shares trading several levels below the 100-day moving average, investors could target potential rebounds at about $73.03, or higher at 476.85, while $66.54 and $62.62 are the support levels.

Ready for a rebound?

In summary, V.F. Corp shares offer exciting long-term growth at a compelling forward P/E ratio, making the stock ideal for long-term investors. 

Therefore, with shares retreating to avoid reaching overbought conditions, a rebound could be close.