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On Friday, Jefferies analysts adjusted their outlook on PVH Corp (NYSE: NYSE:PVH) by reducing the stock’s price target to $95 from $105, while maintaining a Buy rating. This decision follows the company’s recent guidance update. According to InvestingPro data, the stock appears undervalued despite trading at $66.30, with strong fundamentals including an impressive 58.79% gross profit margin.
PVH Corp’s first-quarter results were largely in line with expectations. However, the company reduced its fiscal year 2025 earnings per share guidance by approximately 14%. This adjustment is attributed to limited tariff mitigation options, an increase in promotions, and ongoing challenges with the Calvin Klein platform. The market reaction has been severe, with the stock declining over 20% in the past week.
Sales growth for PVH Corp remains generally stable, showing positive signs of brand momentum. Nevertheless, margin pressures have delayed a potential earnings before interest and taxes inflection, which is now anticipated in the fourth quarter.
The Jefferies analysts noted that while the overall guidance is disappointing, the company’s valuation remains under six times price-to-earnings. They highlighted that the journey to achieve the expected value might require more patience than previously anticipated.
In other recent news, PVH Corp reported first-quarter earnings that exceeded Wall Street expectations, with earnings per share reaching $2.30, surpassing the anticipated $2.23. Revenue was reported at $1.98 billion, above the forecasted $1.93 billion. Despite these positive financial results, the company experienced a sharp decline in stock value, attributed to broader market concerns and a decrease in direct-to-consumer sales. Needham analysts responded by lowering the price target for PVH Corp from $115 to $100 while maintaining a Buy rating, citing the company’s challenges in meeting fiscal year 2025 guidance and market disappointment with its margins. Analysts from Needham also revised their earnings per share forecasts for PVH, reducing them to $10.92 for fiscal year 2025 and $12.76 for fiscal year 2026. The company has announced new leadership for Calvin Klein and is implementing cost-saving measures to address investor concerns. PVH Corp has provided a cautious outlook, projecting flat to slightly increased revenue for the full year, with an expected gross margin decrease of about 250 basis points. The company aims to achieve double-digit operating margins by the end of 2025.
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