This PVH Analyst Believes Investor Concerns Are Overdone: 'Better Trends Are Encouraging'

Shares of PVH Corp PVH were climbing on Monday, after last month's steep decline.

The sell-off in the company’s stock following the release of quarterly earnings last month offers a “buying opportunity,” according to Wedbush.

The PVH Analyst: Tom Nikic upgraded the rating for PVH from Neutral to Outperform, while raising the price target from $113 to $128.

The PVH Thesis: While investors were disappointed by the company’s guidance for flat margins in full-year 2024, it has the opportunity to expand its margins by “hundreds of bps” going ahead, Nikic said in the upgrade note.

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PVH has cost-efficiency tailwinds of 200 to 300 basis points (bps) over the next one to three years, irrespective of the sales trends, while “there's optionality if they're able to achieve sales leverage,” he stated.

“While much of the focus post-Q4 was on the slowdown in Europe…North American DTC growth accelerated to +HSD during the key Holiday shopping period in Q4, from +LSD in Q3,” the analyst wrote. “The brands still haven't fully recovered domestically from the COVID-19 pandemic (FY23 ~20% below FY19), so better trends in North America are encouraging to us,” he added.

PVH Price Action: Shares of PVH had risen by 2.48% to $108.21 at the time of publication on Monday.

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