Billion-Dollar Supreme Acquisition Boosts VFC

VFC has gapped to levels not seen before the pandemic

Deputy Editor
Nov 9, 2020 at 2:41 PM
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The shares of Vans and North Face owner VF Corporation (NYSE:VFC) are up 13.4% at $79.41 at last check, after their acquisition of streetwear name Supreme in a $2.1 billion dollar deal. The popular brand is expected to modestly increase VFC's revenue in the coming year, and add $500 million in revenue for the company's fiscal 2022. 

After bouncing off support at its 100-day moving average at the $66 level, the security has been gradually rising through November. Now, today's bull gap --on track to be the stock's best single-session pop since xx--  has VFC trading at levels not seen since late February. 

VFC Nov 9

Analysts are split on VF Corp stock, with 10 of the 21 analysts in coverage at a "buy" or better rating, and the remaining 11 a "hold" or worse. Meanwhile, the 12-month consensus price target of $80.79 is just a 1.8% premium to current levels., so a shift in analyst attention could fuel more tailwinds.

The options pits have been more confident sentiment, as per VFC's 10-day call/put volume ratio of 2.71 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio stands higher than 74% of readings from the past year, showing calls being picked up at a slightly faster-than-usual rate.

Lastly, now looks like a good time to weigh in on VFC options. The stock's Schaeffer's Volatility Index (SVI) of 39% stands higher than 21% of all other readings in its annual range, implying that options players are pricing in relatively low volatility expectations at the moment. 

 

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