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Shares of V.F. Corporation (VFC - Analyst Report) set a new 52-week high of $168.32 on Tuesday, October 16, 2012, beating its previous 52-week high of $164.54. The closing price of this home improvement retailer as of October 16, 2012 was $168.28, which represented a solid year-to-date return of29.8%. Average volume of shares traded over the last 3 months stands at approximately 597.2 thousand.

Growth Driver

An impressive record of beating the quarterly earnings expectations, robust top-line growth, a raised 2012 outlook, strategies to expand global reach were the major contributors of growth for the shares of this company.

With respect to earnings surprise, VF Corp has topped the Zacks Consensus Estimates for eleven straight quarters with an average of about 12%.

VF Corp has been posting robust growth in its top line since the last two quarters of 2012. During the first quarter, VF Corp’s revenue soared 31%, on the back of strong organic growth of 12% and Timberland acquisition. Moreover, the company witnessed sales growth of 16% in the second quarter of 2012, driven by robust growth in Outdoor & Action Sports and international revenues.

Following the strong quarterly results, management raised earnings forecast for 2012 by 5 cents per share to $9.50 per share, while it had earlier forecasted earnings of $9.45 per share. Moreover, the company augmented its cash flow projection and forecasts to record $1.2 billion in 2012, mainly driven by strong working capital management.

On September 19, 2012, VF Corp came up with massive plans for Asia Pacific, one of the fastest growing regions in the world in order to expand its global presence. The company revealed that it aims to reach to a mark of $1.1 billion of sales in the Asia-Pacific region over the tenure of five years, taking the total regional sales to $2 billion mark by 2017. This represents an annual growth of 17% from projected sales of $900 million for full year 2012.

Earnings Estimate Revision

The Zacks Consensus Estimate for 2012 inched up 1% to $9.53 per share over the last 90 days. The current year-over-year growth estimate for 2012 is 18.5%.

For 2013, the Zacks Consensus Estimate was again raised by about 1% to $10.98 per share over the same time frame. The current year-over-year growth estimate for 2013 is 15.3%.

Valuation

Valuation looks reasonable for VF Corp, with shares trading at 17.7x 12-month forward P/E, at a premium of 21% with its peer group average. Moreover, on a price-to-book basis, shares are currently trading at 4.1x, a 23.3% premium to the peer group average of 3.3x.

Nevertheless, the stock looks attractive given a trailing 12-month ROE of 20.6%, which is higher than the peer group average of 19.7%.

About the Company

Based in Greensboro, North Carolina, V.F. Corporation is one of the world’s largest apparel companies with more than 30 brands. The company primarily generates its revenue from jeanswear, outdoor, imagewear, contemporary brand and sportswear divisions. Major competitors of the company are Gap Inc. (GPS - Analyst Report) and Sears Holdings Corporation (SHLD - Analyst Report).VF Corp has a market capitalization of about $18.5 billion.

Zacks Rank & Recommendation

Based on the above analysis, VF Corp currently carries a Zacks #2 Rank, which translates into a short-term Buy rating for the next 1-3 months. However, we maintain our long-term ‘Neutral’ recommendation on the stock.

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