Buy Rating Affirmed for PVH Corp. with Increased Price Target Amid Strong Financial Performance and Growth Prospects

Analyst Robert Drbul of Guggenheim reiterated a Buy rating on PVH (PVH – Research Report), with a price target of $140.00.

Robert Drbul has given his Buy rating due to a combination of factors including PVH’s recent financial performance and future growth potential. In his analysis, Drbul acknowledges PVH’s adjusted diluted EPS of $3.72 in the fourth quarter of 2023, which surpassed his estimate of $3.52, along with a steady revenue that was above expectations. He notes the direct-to-consumer (DTC) growth in both Calvin Klein and Tommy Hilfiger, as well as PVH’s profitability improvements in North America despite wholesale challenges. Drbul also highlights the company’s strength in the Asia Pacific region which contrasts with the tougher European market.

Moreover, Drbul points to the gross margin expansion to 60.3%, which was higher than forecasted, and attributes this to a favorable mix of regional and channel sales, as well as decreased freight and product costs. Despite anticipating pressure on operating margins due to sales and general administrative expenses (SG&A), he projects earnings growth amplified by PVH’s strategic initiatives. Drbul’s increased price target to $140 from $120 reflects his confidence in PVH’s ability to enhance shareholder value, underscored by a significant stock buyback program and a compelling valuation at just 8.7 times his 2025 EPS estimate.

In another report released yesterday, Barclays also maintained a Buy rating on the stock with a $157.00 price target.

Based on the recent corporate insider activity of 58 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of PVH in relation to earlier this year.

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PVH (PVH) Company Description:

PVH Corp. engages in the design and marketing of branded dress shirts, neckwear, sportswear, jeans wear, intimate apparel, swim products, handbags, footwear, and other related products. It operates through the following segments: Calvin Klein North America, Calvin Klein International, Tommy Hilfiger North America, Tommy Hilfiger International, Heritage Brands Wholesale, and Heritage Brands Retail. The Calvin Klein North America and Calvin Klein International segment operates in North America; and Europe, Asia, and Brazil respectively. It sells its products under the brand names CALVIN KLEIN 205 W39 NYC, CK Calvin Klein, and CALVIN KLEIN. The Tommy Hilfiger North America and Tommy Hilfiger International segment wholesales in North America; and Europe and China respectively. It consists of Tommy Hilfiger, Hilfiger Denim, Hilfiger Collection, and Tommy Hilfiger Tailored brands. The Heritage Brands Wholesale segment markets its products to department, chain, and specialty stores, digital commerce sites operated by select wholesale partners and pure play digital commerce retailers in North America. The Heritage Brands Retail segment manages retail stores, primarily located in outlet centers throughout the United States and Canada. PVH was founded in 1881 and is headquartered in New York, NY.