11:57 AM EDT, 07/17/2024 (MT Newswires) -- VF's (VFC) sale of its Supreme brand to EssilorLuxottica for $1.5 billion in cash appears to be a "double-edged sword," Wedbush said Wednesday in a report.

"On the bright side, it will give them much-needed balance sheet flexibility" with the company facing $1.75 billion in debt due in the next nine months, while Supreme was "the most profitable brand in the portfolio," Wedbush said.

"While this deal does relieve the pressure from near-term debt maturities, there's still quite a bit of work to be done to clean up the balance sheet," Wedbush said.

The transaction, expected to close by the end of the year, probably means earnings dilution of $0.20 to $0.23 a share, Wedbush said.

Wedbush raised its price target on VF stock to $13 from $11 with a neutral rating.

VF shares rose 7.7% in recent trading. The Supreme deal was announced earlier Wednesday.

VF shares rose 7.6% in recent trading.

Price: 15.32, Change: +1.10, Percent Change: +7.70