Jefferies has raised its recommendation for PVH Corp. (PVH, Financial), moving it from a Hold to a Buy, while also increasing the price target from $70 to $105. According to the analyst, new executive strategies combined with overcoming previous challenges are expected to facilitate a return to low-single-digit sales growth for PVH. This anticipated growth is seen as a significant driver for the stock. Additionally, the firm highlights that cost reductions and stock buyback strategies are projected to enhance the company's earnings, aiming for high-single-digit growth throughout the year. Jefferies' cash flow analysis indicates minimal risk to the stock near the $65 mark.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 12 analysts, the average target price for PVH Corp (PVH, Financial) is $92.58 with a high estimate of $140.00 and a low estimate of $68.00. The average target implies an upside of 15.01% from the current price of $80.50. More detailed estimate data can be found on the PVH Corp (PVH) Forecast page.
Based on the consensus recommendation from 14 brokerage firms, PVH Corp's (PVH, Financial) average brokerage recommendation is currently 2.4, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for PVH Corp (PVH, Financial) in one year is $95.90, suggesting a upside of 19.13% from the current price of $80.5. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the PVH Corp (PVH) Summary page.
PVH Key Business Developments
Release Date: April 01, 2025
- Revenue: Down 2% on a constant currency basis for Q4; full-year revenue down 6% on a reported basis.
- Gross Margin: Record-high 59.4% for the full year; Q4 gross margin at 58.2%, down 210 basis points from last year.
- Net Income (EPS): Record-high non-GAAP EPS of $11.74 for the full year, up 10% from 2023.
- Operating Margin: 10% for the full year, maintaining double-digit EBIT margins.
- Cash Flow: Free cash flow of nearly $600 million for the year.
- Share Repurchases: $500 million returned to shareholders through repurchase of 4.7 million shares.
- Inventory: Up 6% year-over-year, focusing on best-selling core product categories.
- Regional Performance: North America EBIT up over 40%; Europe ended with two consecutive quarters of DTC store revenue growth; Asia-Pacific delivered revenue growth in constant currency.
- 2025 Outlook: Revenue projected to be flat to up slightly; operating margin flat to up slightly; EPS projected in the range of $12.40 to $12.75.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- PVH Corp (PVH, Financial) exceeded its initial fiscal 2024 guidance with stronger-than-expected revenue and higher-than-expected non-GAAP EPS.
- The company achieved a record-high gross margin of 59.4% for the year, marking a 120 basis point increase.
- PVH Corp (PVH) maintained double-digit EBIT margins at 10% despite fixed cost deleveraging in Europe.
- The company reported significant growth in consumer engagement and product sell-through for both Calvin Klein and Tommy Hilfiger.
- PVH Corp (PVH) successfully returned its European wholesale order books to growth, indicating strong execution of its PVH+ Plan.
Negative Points
- PVH Corp (PVH) faces uncertainty around US consumer demand and macroeconomic pressures.
- The company has been added to MOFCOM's unreliable entity list, creating potential challenges in China.
- Calvin Klein experienced product development delays, leading to temporary margin headwinds.
- The company anticipates a decline in revenue in China due to post-New Year holiday slowdown.
- PVH Corp (PVH) expects a more promotional environment and increased freight costs to impact gross margins in the first quarter of 2025.
