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Understanding the Analyst Reactions to PVH Corp’s 4Q16 Results

Sonya Bells - Author
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Mar. 28 2017, Updated 7:36 a.m. ET

Management outlook is bullish for 2017

As PVH Corporation (PVH) posted solid 4Q16 results, the company’s management maintained a bullish tone for earnings this fiscal year. The management has guided the fiscal 2017 EPS (earnings per share) to be in the range of $7.30–$7.40, which is higher than the expectation of $7.26 on Wall Street.

During the 4Q16 earnings call, Emanuel Chirico, chairman and CEO (chief executive officer) of PVH Corp, stated: “We expect that our proven business model and talented associates will continue to drive the execution of our strategic initiatives in an ever-changing environment while delivering stockholder value.”

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Recent analyst reactions to PVH’s performance

As a result of PVH Corp’s solid results and encouraging outlook, the analyst community remains positive about the company.

Wells Fargo analyst Ike Boruchow stated: “As a clear outlier in the manufacturer space today (most other brands are shrinking, missing plan and guiding down), the PVH story should continue to work, and we’d expect a meaningful re-rating of shares accordingly (shares trading at just 12x-13x).” Boruchow reiterated an “outperform” rating on PVH, with a $125–127 price target range.

Cowen & Company analyst John Kernan raised PVH Corp’s price target to $118.00 from $108.00 while maintaining the “outperform” rating. Specifically, Kernan stated: “Spring European order books are ~8% for Tommy Hilfiger and ~20% for Calvin Klein and Fall ~10% for TH and +25% for [Calvin Klein], demonstrating the strong demand for the brand internationally. We like management’s recent acquisition of True & Co. to capitalize more on digital, data and personalization trends in retail. Raising price target to $118 from $108, 15x fiscal 18E EPS and 9x EV-to-EBITDA.”

Notably, ETF investors looking to add exposure to PVH can always consider the First Trust Large Cap Value AlphaDEX Fund (FTA), which invests 0.97% of its portfolio in PVH.

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