CFRA cuts PVH Corp price target to $138, maintains buy rating By

On Tuesday, research firm CFRA changed its financial outlook for PVH Corp (NYSE: ), a global apparel company. The company lowered its price target to $138 from the previous price of $159. Despite the reduction, CFRA maintained a Buy rating on the stock.

The decision to lower the price comes after reassessing the company’s future profitability. The new target assumes CFRA’s 2025 earnings multiple of 12.0 times (end January) earnings per share (EPS), which is below PVH Corp’s five-year average forward price (P/E) multiple of 13.1 x. Additionally, CFRA reduced its FY 25 EPS estimate for PVH Corp by $1.75 to $11.50 and initiated a FY 2026 EPS estimate of $12.25.

PVH Corp recently reported fourth quarter adjusted earnings of $3.72 per share compared to $2.38 in the same period last year, topping the consensus estimate by $0.20. Revenue was reported at $2.49 billion, in line with estimates and $69 million above expectations. In particular, direct-to-consumer revenue increased year-over-year by 9%, while total revenue decreased by 10%. Digital sales showed a slight increase of 1%.

Quarterly performance also reflects brand growth, with Tommy Hilfiger’s revenue up 1% year-over-year and Calvin Klein’s revenue growing 4%. PVH Corp’s gross margin in the segment expanded by 440 basis points to 60.3%, due to lower freight costs, improved segment mix and distribution channels, and lower product costs.

While expressing dismay at PVH Corp’s management over the years, CFRA believes that the market’s reaction to short-term sales is extremely difficult. The company indicates that the company’s stable management may allow future earnings to exceed expectations, which may lead to adjustments in the coming quarters. CFRA also notes that with the stock currently trading at around 10 times FY 25 EPS guidance, there is a price opportunity for investors.

InvestingPro Insights

As PVH Corp moves through the stock market, real-time data from InvestingPro provides in-depth insight into the company’s health and stock performance. With a market capitalization of approximately $6.38 billion and a P/E ratio standing at 10, PVH Corp presents itself as an attractive opportunity considering its growth potential. The company’s revenue in the last twelve months from Q3 2024 was $9.216 billion, with a gross margin of 56.99%, showing its ability to maintain profitability amid market pressures.

InvestingPro’s guidance indicates that PVH Corp is expected to see earnings growth this year, and analysts believe the company is profitable. In addition, the stock has increased in value over the past six months, with a 6-month price return of 85.89%, indicating strong investor confidence. These recommendations may be particularly relevant for investors looking for opportunities to grow in the apparel sector. For those who want to learn more, InvestingPro offers 5 additional tips on PVH Corp, which can be found with special offers. Use the coupon code PRONEWS24 to receive an additional 10% on annual or bi-annual Pro and Pro+ subscriptions.

This article was created with the help of AI and reviewed by an editor. For more information see our T&C.

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