On Thursday, BofA Securities updated its stance on PVH Corp (NYSE:PVH) shares, reducing the price target to $133 from $144, while keeping a Buy rating on the stock. The adjustment follows a 17% decline in PVH Corp's stock since the announcement of its first-quarter results earlier in June.
The current valuation of PVH Corp at 5.7 times its forecasted fiscal year 2025 enterprise value to EBITDA (EV/EBITDA), or 8 times price-to-earnings (P/E), is seen as attractive by the firm, especially considering the anticipated 14% earnings per share (EPS) growth in fiscal year 2025.
The firm's analyst noted that the reduced price objective is based on a multiple of 8 times the expected fiscal year 2025 EV/EBITDA, a decrease from the previous 8.5 times, reflecting a broader re-rating of peer multiples.
Despite the lower price target, the firm's positive outlook is sustained by expectations of a strong second-quarter performance, confirmation of full-year guidance, and reassurances that market conditions in Europe are not deteriorating.
The analyst highlighted that the stock could outperform if the upcoming second-quarter results are in line with or exceed expectations, and if the company reaffirms its full-year guidance. Moreover, a stable outlook on European trends would further bolster investor confidence.
PVH Corp is scheduled to report its second-quarter results next week, and the market will be looking for signs of resilience in the face of recent stock performance challenges.
The firm's commentary indicates a belief that PVH Corp is positioned for a potential rebound, provided that the company can deliver on key financial metrics and market stability.
In other recent news, PVH Corp's second-quarter sales and earnings per share (EPS) are expected to align with consensus estimates, according to Citi, which has maintained a neutral stance with a $125 price target.
Citi also anticipates that PVH Corp will reiterate its full-year 2024 guidance of $11.00 to $11.25 per share. The company's first-quarter earnings exceeded expectations, with a reported 3% growth in its direct-to-consumer business and a 14% increase in EPS to $2.45.
Recent developments include the appointment of Kate Gulliver, CFO and CAO at Wayfair (NYSE:W) Inc., to PVH Corp's Board of Directors and Audit & Risk Management Committee.
This strategic move is expected to contribute to PVH’s ambition for sustained, profitable growth. In a recent shareholder meeting, executive compensation was approved and the board of directors elected.
Analyst firms TD Cowen and BofA Securities have raised PVH Corp's share price target to $154 and $144 respectively, both maintaining a Buy rating on the stock.
Despite challenging macroeconomic conditions, the company reaffirmed its revenue outlook for the full year while raising its EPS guidance. These are recent developments that suggest PVH Corp is on a positive trajectory.
InvestingPro Insights
In light of BofA Securities' recent update on PVH Corp (NYSE:PVH), InvestingPro data and tips offer additional context that could be valuable for investors. The company's management has been actively repurchasing shares, a sign of confidence in the intrinsic value of the stock, which aligns with the firm's continued Buy rating. Additionally, PVH Corp's impressive gross profit margins, standing at 58.94% over the last twelve months as of Q1 2025, underscore the company's strong operational efficiency.
InvestingPro data highlights a P/E ratio of 9.08, which, when adjusted for the last twelve months as of Q1 2025, further contracts to 7.96, reinforcing the attractive valuation noted by BofA Securities. Moreover, a notable InvestingPro Tip points to PVH's high shareholder yield, complementing the firm's viewpoint on the stock's current attractiveness.
For investors seeking a more in-depth analysis, there are additional InvestingPro Tips available, including insights into PVH's stock price volatility and the company's long history of maintaining dividend payments for 54 consecutive years. These elements may offer investors a more nuanced understanding of the stock's potential performance, especially in light of the upcoming second-quarter results.
Investors can explore these insights and more on InvestingPro, where a total of 8 additional tips are listed for PVH Corp, providing a comprehensive analysis that could inform investment decisions.
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