VFC Sets Analysts, Option Traders Abuzz

Sentiment surrounding VFC is already generally optimistic

Deputy Editor
Mar 8, 2021 at 3:00 PM
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The shares of VF Corp (NYSE:VFC) are on the rise today, up 4% at $81.95 at last check, following an upgrade from Pivotal Research Group to "buy" from "hold." The analyst also upped its price target to $94 from $86, citing strong demand for its North Face and Timberland brands, which have both seen improvement in full-price selling during the winter months. The firm also added that the company's Vans brand should see a strong comeback from its pandemic-sparked slump. 

A look at VFC's intraday options activity shows 13,000 calls have been exchanged so far, which is four times what is typically seen at this point. The 4/1 87-strike call is getting the most attention, followed by the 3/26 86-strike call, with new positions being opened at the former.

Calls outpacing puts has been the norm of late. In fact, at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), VFC sports a 10-day call/put volume ratio of 65.26, which stands higher than 100% of readings from the past 12 months. Additionally, the security's Schaeffer's put/call open interest ratio (SOIR) of 0.19 sits in the eighth percentile of its annual range, meaning short-term option traders have rarely been more call-biased. 

Moving onto analyst sentiment, the  the brokerage bunch is moslty optimistic, with only a few hold-outs. Of the 17 covering VFC, just five call it a "hold" or worse, compared to 12 "buy" or better ratings. Plus, the 12-month consensus price target of $93.95 is a 14.8% premium to current levels. 

This generally positive outlook is unsurprising. The security sports a year-over-year lead of 16.8%, and it looks like two of its most recent pullbacks were captured by the $76 level. The 140-day moving average also acted as a net for the equity late last week, while the 120-day moving average could also step in as underlying support going forward. 

VFC Chart March 8

For those wanting to speculate on VFC's next move, options could be the way to go. The security's Schaeffer's Volatility Index (SVI) of 31% sits in the sixth percentile of its annual range. This implies option traders are pricing in relatively low volatility expectations for the equity at the moment. 

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