On Monday, JPMorgan included shares of PVH Corp. (NYSE:), the parent company of brands like Calvin Klein and Tommy Hilfiger, in its Analyst Focus List. The firm raised its expectations for the company’s future earnings per share (EPS), citing a more robust growth outlook than the broader analyst community.
The company expects PVH to have fiscal 2024 EPS of $10.96, slightly above the consensus estimate of $10.95. Looking further ahead, JPMorgan raised its fiscal 2025 EPS forecast to $14.53, which was 15% higher than the public’s expectation of $12.51. This adjustment is based on expected year-over-year revenue growth of 2%, versus the street projection of 3%, and operating margins of 12.6% versus consensus of 10.8%.
For fiscal 2026, JPMorgan analysis suggests PVH could achieve EPS of $17.57, nearly 25% higher than the current consensus of $14.22. This forecast assumes a margin profile of 14.0%, compared to the Street’s forecast of 11.3%. Furthermore, the analysis indicates that every $100 million in share repurchases could contribute an additional $0.15 to the company’s EPS.
In terms of valuation, JPMorgan referenced PVH’s historical pre-pandemic multiple of 9x, derived from department store and specialty softline revenue/margin regression results. Applying this multiple to the company’s projected fiscal 2025 EBITDA yields a projected asset value of $193 for PVH Corp.
PVH Corp.’s inclusion in JPMorgan’s Analyst Focus List and upward revision to its EPS forecast reflect a positive outlook for the company’s financial performance in the coming years.
Insights on InvestingPro
Following JPMorgan’s optimistic outlook for PVH Corp., InvestingPro’s current metrics reinforce the company’s potential. With a market capitalization of $6.27 billion and an attractive price-to-earnings (P/E) ratio of 9.97, PVH appears to be efficiently valued in the market. Notably, the adjusted P/E ratio for the trailing twelve months as of the fourth quarter of 2024 is even lower at 8.93, suggesting a potentially undervalued stock.
InvestingPro’s recommendations highlight that management’s aggressive stock buyback strategy and the company’s high shareholder returns could be key drivers of future stock performance. Furthermore, the stock’s oversold status according to the Relative Strength Index (RSI) suggests that there may be a buying opportunity for investors. It is worth noting that PVH has maintained dividend payments for 54 consecutive years, which demonstrates its financial stability and commitment to returning value to shareholders.
To gain further insights and access additional InvestingPro recommendations for PVH Corp., investors can explore the detailed analysis available on InvestingPro. With 11 more tips to consider, there’s a wealth of information to help you make informed decisions. Remember to use the coupon code PRONEWS24 to get an additional 10% discount on the annual or biennial Pro and Pro+ subscription.
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