’Reddit is built for this moment’ - Stock soars on crushed earnings
On Thursday, UBS analyst Jay Sole reaffirmed a Buy rating with a price target of $160.00 on shares of PVH Corp (NYSE:PVH), a clothing company known for brands such as Calvin Klein and Tommy Hilfiger. Sole’s outlook is grounded in the belief that PVH possesses the necessary brand strength and financial stability to fuel earnings growth over an extended period. According to InvestingPro data, PVH currently maintains a GOOD financial health score, with analyst targets ranging from $80 to $160 per share. The stock appears undervalued based on InvestingPro’s Fair Value analysis.
Sole predicts that PVH will achieve a double-digit percentage compound annual growth rate (CAGR) in earnings per share (EPS) over the next five years. He attributes this potential growth to the ongoing efforts of CEO Stefan Larsson, who is currently implementing strategies aimed at enhancing the company’s profitability. The company already demonstrates impressive gross profit margins of 59.4%, according to InvestingPro data. According to Sole, PVH is still in the early stages of realizing significant margin improvements that should materialize in the coming years.
The analyst’s confidence is further bolstered by PVH’s strong performance in the fourth quarter, which he believes supports the case for the company’s earnings recovery and the clarification of long-term growth drivers. Sole suggests that as PVH continues to demonstrate its earnings potential and as market skepticism wanes, the stock’s forward price-to-earnings (P/E) ratio, currently at 6x, is poised to rise substantially.
Sole’s commentary reflects a positive outlook for PVH, emphasizing the company’s capacity for profitability enhancement under Larsson’s leadership. The analyst’s maintained price target of $160.00 per share represents UBS’s expectation for the stock’s value, in light of the anticipated earnings growth and strategic initiatives underway at PVH.
In other recent news, PVH Corp reported better-than-expected earnings for Q1 2025, with earnings per share (EPS) of $3.27, surpassing analyst forecasts of $3.24. The company also reported revenue of $2.37 billion, slightly above the expected $2.34 billion. This strong financial performance was highlighted by a record high gross margin of 59.4% and a 10% increase in non-GAAP EPS compared to 2023. Citi analysts recently adjusted their price target for PVH, raising it to $83 from $72, while maintaining a Neutral rating, following PVH’s robust holiday sales performance. However, PVH’s management projects a low double-digit sales decline in China for the fiscal year 2025, reflecting ongoing market challenges. The company also plans to accelerate its share repurchase program in April, indicating a focus on returning value to shareholders. Despite these positive developments, challenges such as potential tariffs and a fluctuating consumer environment remain concerns, particularly in North America and China.
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