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On Tuesday, TD Cowen analysts increased their price target on PVH Corp (NYSE:PVH) shares to $125 from $110, while reaffirming their Buy rating on the company. The adjustment follows PVH Corp’s fourth-quarter results, which surpassed the already lowered expectations and provided guidance that suggests confidence for fiscal year 2025. According to InvestingPro data, PVH currently trades at an attractive P/E ratio of 5.2x and maintains impressive gross profit margins of 60%.
PVH Corp, the parent company of brands such as Tommy Hilfiger and Calvin Klein, has recently committed to a $500 million accelerated share repurchase program, which represents about 14% of the company’s market capitalization. This move underscores the management’s belief in the success of their PVH+ Plan, a strategic approach aimed at driving long-term growth and profitability. InvestingPro analysis highlights that management has been aggressively buying back shares, one of several bullish indicators available to Pro subscribers.
The raised price target to $125 is based on a valuation of 10 times the estimated earnings per share (EPS) for fiscal year 2025 and approximately 6 times the enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) ratio. Current InvestingPro data shows an EV/EBITDA of 5.5x and strong free cash flow yield, suggesting potential value opportunity. The analyst’s commentary highlighted the company’s stable margins and the potential to navigate through macroeconomic risks such as China’s market, tariffs, and foreign exchange fluctuations.
PVH’s fourth-quarter performance and the subsequent guidance for fiscal year 2025 have been a testament to the company’s resilience and strategic planning. The $500 million share repurchase program further demonstrates the company’s commitment to delivering value to its shareholders.
The positive outlook from TD Cowen reflects a belief in PVH Corp’s ability to maintain margin stability and growth despite the various external challenges it faces. The company’s focus on its strategic initiatives, including the PVH+ Plan, is expected to continue driving its performance in the coming years.
In other recent news, PVH Corp reported fourth-quarter earnings that exceeded analyst expectations, with an adjusted earnings per share (EPS) of $3.27, surpassing the forecasted $3.24. Revenue for the quarter reached $2.37 billion, slightly above the expected $2.34 billion, despite a year-over-year decline. Looking ahead, PVH projects fiscal 2025 EPS between $12.40 and $12.75, outpacing the consensus estimate of $11.68, and anticipates steady to slightly increased revenue compared to 2024. UBS analysts maintained a Buy rating on PVH, citing brand strength and financial stability, and projecting a double-digit EPS compound annual growth rate over the next five years. However, BMO Capital Markets and Evercore ISI adjusted their price targets for PVH to $93 and $105, respectively, while maintaining a Market Perform and Outperform rating. BMO noted challenges such as gross margin contraction, while Evercore highlighted positive signals like increased European backlogs but also pointed out challenges in China and the U.S. PVH’s strategic initiatives include a $500 million Accelerated Share Repurchase program, which Evercore ISI sees as a defensive measure against undervaluation. CEO Stefan Larsson expressed confidence in PVH’s long-term growth, emphasizing the company’s robust performance and strategic positioning for 2025.
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