🐂 Not all bull runs are created equal. November’s AI picks include 5 stocks up +20% eachUnlock Stocks

BofA Securities ups PVH Corp shares target amid margin opportunities

EditorEmilio Ghigini
Published 06/06/2024, 11:28
PVH
-

On Thursday, BofA Securities exhibited confidence in PVH Corp (NYSE:PVH) shares, as it raised the apparel company's price target to $144 from $122, while reiterating a Buy rating on the stock.

The firm's optimism follows PVH's first-quarter earnings, which surpassed expectations. BofA highlighted the company's long-term margin opportunities and improving European trends after a wholesale reset as key drivers for the positive outlook.

The adjusted earnings per share (EPS) for PVH in the first quarter were above analyst forecasts, partly due to an advance in wholesale shipments spurred by strong sales, some shifting of expenses from the first quarter to the second, and reduced tax and interest expenses.

In response to the earnings beat and a robust second-quarter guidance, BofA has increased its forecast for PVH's fiscal year 2024 EPS by $0.50 to $11.30.

BofA's new price objective of $144 reflects an 8.5 times forward enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) multiple for fiscal year 2025. This valuation is consistent with PVH's long-term average and accounts for a forward roll in the valuation year.

The firm's analysis suggests that PVH's financial health and market position are expected to remain solid, underpinning the rationale behind the upgraded price target.

PVH's first-quarter performance, marked by the EPS beat, indicates a positive momentum for the company, which is known for its portfolio of brands including Tommy Hilfiger and Calvin Klein.

The company's strategic management of expenses and anticipation of continued strong performance in the second quarter have contributed to the favorable assessment by BofA Securities.

Investors and market watchers will likely monitor PVH's progress as it navigates the retail landscape, with particular attention to its European operations and margin expansion efforts. The updated price target from BofA Securities serves as a financial indicator of PVH's potential trajectory in the near to medium term.

InvestingPro Insights

As BofA Securities raises its price target for PVH Corp, aligning with the company's robust first-quarter earnings, InvestingPro data and tips provide additional context for investors considering the stock. PVH's management has demonstrated confidence through aggressive share buybacks, complementing a high shareholder yield. Moreover, the company's financials show impressive gross profit margins at 58.94% over the last twelve months as of Q1 2023, supporting BofA's positive outlook on long-term margin opportunities.

With a P/E ratio of 10.61 and an even more attractive adjusted P/E ratio of 9.82 for the same period, PVH appears to be valued favorably in the market. Furthermore, the company's stock price has seen a significant return over the last week, with a 7.64% price total return, underscoring the market's reaction to recent developments. Analysts remain optimistic, predicting profitability for the year and noting that PVH has maintained dividend payments for 54 consecutive years, a testament to its financial resilience and commitment to shareholders.

For investors interested in a deeper dive, there are over 9 additional InvestingPro Tips available, which can be accessed at https://www.investing.com/pro/PVH. These tips offer insights into factors such as earnings revisions, stock price volatility, and the company's liquidity position. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking a wealth of data and analysis to inform your investment decisions.

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

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.