On Wednesday, BMO Capital Markets adjusted its price outlook for PVH Corp (NYSE:PVH), the parent company of Calvin Klein and Tommy Hilfiger, raising the price target to $119 from $110 while maintaining a Market Perform rating. This change follows PVH Corp's recent financial results which showcased a top-line revenue beat, with particular strength noted in the Calvin Klein brand in North America.
The company's gross margins exceeded expectations, contributing to a bottom-line beat. However, the Tommy Hilfiger brand experienced a slight underperformance, primarily due to challenges in the European market. Despite this, second-quarter sales forecasts are set higher than Wall Street expectations, with earnings per share (EPS) projections also slightly above consensus.
For the full fiscal year, PVH Corp has increased its EPS guidance based on tax and interest considerations, while maintaining its sales and EBIT margin outlook. This suggests a conservative stance for the rest of the fiscal year's EBIT guidance, despite a stronger-than-anticipated first-quarter EBIT performance. The firm has also raised its EPS estimates above the Street's expectations, citing these factors and the robust first-quarter results.
The revised price target of $119 is based on approximately 10 times the estimated EPS for the fiscal year 2025, indicating BMO Capital's updated valuation of PVH Corp's stock in light of the recent earnings report and forward-looking guidance.
In other recent news, PVH Corp has been the subject of attention from financial analysts. UBS has maintained a Buy rating on PVH Corp stock, citing the company's brand strength and solid balance sheet as key factors expected to drive long-term earnings growth. The firm predicts a double-digit earnings per share (EPS) compound annual growth rate for PVH Corp. Additionally, Evercore ISI has raised its price target for PVH Corp shares to $145 from $140, following a strong first-quarter performance.
In the same vein, PVH Corp recently reported adjusted earnings per share (EPS) of $2.45 for its first quarter, surpassing analyst expectations. The company's revenue remained steady at $1.93 billion, aligning with consensus estimates. The company also raised its full-year EPS guidance on a GAAP basis to $11.15 to $11.40, up from the previous range of $10.75 to $11.00.
These are the recent developments for PVH Corp. According to UBS, the market is likely to recognize additional growth opportunities for PVH Corp, leading to an expansion of the stock's forward price-to-earnings (P/E) ratio. Evercore ISI also indicated that the valuation discrepancy between PVH Corp and its peers is too large, given the expectation that the 2024 projections will prove to be conservative as the year progresses.
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