PVH Corp and Its Peers: Stock Returns, Valuations, Earnings

Sonya Bells - Author

Aug. 30 2017, Updated 10:36 a.m. ET

PVH is the best-performing branded apparel stock this year

After PVH Corp (PVH) reported strong second-quarter results, maintaining its positive earnings surprise streak for the 13th consecutive quarter, PVH stock touched its three-year high of $130.25 on August 24, 2017.

PVH is now sitting at a YTD (year-to-date) rise of 39.0% and is among the best-performing apparel stocks. In comparison, VF Corporation (VFC) and Hanesbrands (HBI) have YTD rises of 19.0% and 12.5%, respectively, while Ralph Lauren (RL) and Michael Kors (KORS) have fallen 3.5% and 1.6%, respectively, YTD.

PVH has also outperformed the S&P 500 Apparel and Accessories Index and the S&P 500 Index (SPX), which have risen 7.4% and 9.1%, respectively, to date.

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PVH is currently valued at a one-year forward PE (price-to-earnings) ratio of 15.2x. That’s close to the upper end of its 52-week PE ratio range of 12.0x to 16.0x.

The company trades at a discount to peers VF Corp (VFC) (20.0x) and Ralph Lauren (RL) (16.4x) but at a premium to Hanesbrands (11.9x) and Michael Kors (11.4x).

Comparing earnings potential

Looking at near-term earnings potentials, PVH is better placed than the above-mentioned apparel companies. Its EPS (earnings per share) is expected to rise 15.5% over the next 12 months.

That compares to expected falls of 7.5% and 9.9% in EPS for Ralph Lauren and Michael Kors, respectively, and rises of 6.2% and 6.9% for VF Corp and Hanesbrands, respectively.

ETF investors seeking to add exposure to PVH can consider the iShares Morningstar Mid-Cap Value ETF (JKI), which invests 0.63% of its portfolio in PVH.


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