Wall Street’s view: PVH versus peers
PVH Corp (PVH) is covered by 16 Wall Street analysts who have together given a neutral-to-positive view of the company. The analysts have rated PVH as a 2.3 on a scale of 1 (strong buy) to 5 (strong sell).
This rating is better than peers Ralph Lauren (RL), VF Corp (VFC), and Gap (GPS), who have been rated 2.9, 2.8, and 3.1, respectively, by their analysts. Hanesbrands (HBI), however, has received a better consensus rating of 1.7.
Notably, 56% of analysts covering PVH have recommended a “buy” on the stock. By comparison, 26% and 6% recommend buying VFC and Ralph Lauren. Hanesbrands, with 79% “buy” ratings, is the most preferred stock by the analysts.
As for “hold” ratings, 38% of the analysts have recommended this action for PVH stock, while only 6% have recommended a “sell” for the stock. None of HBI’s analysts has recommended a “sell” for HBI stock.
Comparing target price and gain potential
PVH Corp is currently trading at $93.83, which is ~23% below its 52-week high price. Analysts expect the company’s stock price to touch $110.7 in the next 12 months, which indicates a potential upside of 17%—better than that of VFC and Ralph Lauren. The stock prices of these two companies are projected to fall 1% and 4% respectively. Hanesbrands stock, however, is likely to jump 30% during the next year.
PVH is currently trading at a one-year PE (price-to-earnings) earnings multiple of 13.3x, operating closer to the lower end of its 52-week PE ratio range of 12x–16.3x. It’s now trading at a discount to peers VF Corp and Ralph Lauren, which are valued at 17.7x and 16x, respectively. But Hanesbrands and Gap are more cheaply valued at 10.4x and 12x, respectively.
Notably, ETF investors seeking to add exposure to PVH might consider the First Trust Large Cap Value AlphaDEX Fund (FTA), which invests 0.9% of its portfolio in PVH.