PVH shares target cut, retains buy rating amid growth concerns By Investing.com

On Thursday, TD Cowen adjusted its outlook on shares of PVH Corp (NYSE:), the parent company of Calvin Klein and Tommy Hilfiger, by reducing the price target from $149.00 to $135.00. Despite this change, the firm maintained its Buy rating on the stock.

The revision comes as investors express caution about the company’s future financial targets, particularly in light of an expected year-over-year decline in EBIT dollars in the second half of 2024. This projected dip has raised concerns regarding the growth prospects for the fiscal year 2025.

The new stock price target of $135.00 is based on a valuation of 10 times the forecasted fiscal year 2025 earnings per share (EPS) of $13.36 and 6.8 times the enterprise value to EBITDA (EV/EBITDA) ratio. These figures are part of the firm’s financial modeling and valuation metrics.

PVH Corp is anticipated to fully launch its management’s complete assortment across its Calvin Klein and Tommy Hilfiger brands in the fall of 2024. This strategic move is expected to be a significant milestone for the company.

In a positive note, the analyst highlighted that PVH’s wholesale business saw a 1% year-over-year increase in the second quarter, which could be seen as an encouraging sign amidst broader concerns. This performance indicates some resilience in the company’s wholesale operations despite the challenging market conditions.

In other recent news, PVH Corp., the parent company of fashion brands Calvin Klein and Tommy Hilfiger, reported its Q2 2024 earnings, hitting stable revenue and surpassing profitability expectations. The company maintained its full-year financial guidance, despite a minor decline in direct-to-consumer and wholesale revenues, and raised its non-GAAP EPS outlook due to a tax benefit.

PVH Corp. is also in the process of appointing a new CEO for its European division and formulating strategies to overcome the challenging consumer market in China. The company’s performance varied across regions, with North America showing strong execution, Europe focusing on sales quality, and Asia Pacific, particularly China, facing challenges.

Despite a 6% year-over-year decrease in Q2 revenue, with international businesses down 3% on a constant currency basis, PVH Corp. showed signs of resilience. The company saw a 1% revenue increase in North America, improved gross margins by 250 basis points, and decreased its inventory by 12% compared to the previous year.

These recent developments indicate PVH Corp.’s commitment to its growth strategy and operational efficiency, as it navigates market challenges and focuses on strengthening its brands.

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