On Wednesday, UBS reiterated its Buy rating on PVH Corp (NYSE:PVH) stock, with a price target of $160.00.
The firm's analyst highlighted the apparel company's brand strength and solid balance sheet as key factors that are expected to drive earnings growth in the long term. UBS predicts a double-digit earnings per share (EPS) compound annual growth rate (CAGR) for PVH Corp.
The analyst expressed confidence in the ability of PVH's CEO, Stefan Larsson, to enhance the company's profitability. According to UBS, Larsson is currently in the "middle innings" of his strategy to boost PVH's financial performance, with significant margin improvements anticipated in the coming years.
UBS also pointed out that as PVH's earnings recover and the company's long-term growth drivers become more evident, the market is likely to recognize additional opportunities, leading to an expansion of the stock's forward price-to-earnings (P/E) ratio, which currently stands at 9 times FY2 earnings.
The investment firm's $160 price target implies a 34% upside from PVH's current stock price, signaling a strong vote of confidence in the company's future prospects and potential for stock price appreciation.
InvestingPro Insights
Analysts at UBS have expressed a bullish stance on PVH Corp, and real-time data from InvestingPro supports a positive outlook. With a market capitalization of $6.75 billion, PVH shows a promising P/E Ratio of 10.95, indicating a potentially undervalued stock given its earnings. Moreover, the company's adjusted P/E Ratio over the last twelve months as of Q4 2024 stands at an even more attractive 9.56. InvestingPro Tips suggest that PVH's aggressive share buybacks and high shareholder yield are strategies that could bolster investor confidence. Additionally, PVH has demonstrated a robust gross profit margin of 58.18% over the same period, underscoring efficient operations and strong pricing power.
InvestingPro also highlights that PVH has maintained dividend payments for 54 consecutive years, reflecting a commitment to returning value to shareholders—a factor that may resonate well with investors seeking stability in the form of regular income. Furthermore, PVH's stock has had a high return over the last year, with a 55.2% price total return, which could capture the attention of growth-oriented investors. For those interested in deeper analysis, InvestingPro offers additional tips on PVH and other companies; with the use of coupon code PRONEWS24, users can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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