Why PVH Corp. is among the Best-Rated Apparel Stocks



PVH is Wall Street’s favorite apparel stock

Phillips-Van Heusen Corporation or PVH Corp. (PVH) is among the best-rated apparel stocks. The company is rated a 1.9 on a scale of 1 (strong buy) to 5 (strong sell).

In comparison, Ralph Lauren (RL), Michael Kors (KORS), and VF Corp. (VFC) are rated 3.0, 3.0, and 2.6, respectively. Hanesbrands (HBI), which we’ll discuss in the next part of this series, also has a strong rating of 2.0.

78% of analysts who cover PVH recommend buying the stock while 22% suggest holding it. There’s no “sell” recommendation on the company.

The reason for PVH’s solid ratings is its consistent performance and strong growth expectations. The company has delivered 13 consecutive earnings beats.

Its near-term earnings potential is better than peers. PVH’s earnings per share are expected to rise 16.2% over the next 12 months. In comparison, Ralph Lauren’s and Michael Kors’ earnings are projected to fall 6.6% and 9.7%, respectively.

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Recent analyst actions on PVH

Barclays initiated coverage on PVH with an “overweight” rating on September 20. Analyst Chethan Mallela noted that the company has “superior momentum visibility” compared to apparel peers and its strong business model looks resilient to industry changes.

On September 12, Bernstein initiated coverage on PVH with a “market perform” rating.

Stock market performance and potential upside

PVH Corp. is among this year’s best-performing apparel stocks. The company has gained 39% YTD (year-to-date). In comparison, VF Corporation and Michael Kors are sitting at YTD gains of 16% and 7%, respectively, while Ralph Lauren has lost around 2% to date.

ETF investors seeking to add exposure to PVH can consider the iShares Morningstar Mid-Cap Value ETF (JKI), which invests 0.6% of its portfolio in PVH.


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