PVH Stock Is Still on the Ropes. Analysts Are Cutting Their Price Targets.

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PVH owns the Tommy Hilfiger brand.

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Dreamstime

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PVH The stock is still falling as investors react to disappointing financial forecasts from the retailer. Several analysts cut their targets for the stock price, and Morgan Stanley downgraded the shares.

Stock in PVH (ticker: PVH), formerly known as the Phillips-Van Heusen Corporations, was down more than 6% to $77.53 on Thursday, after a similar plunge the day before. The stock has fallen more than 27% year to date.

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On an earnings call on Wednesday, held to discuss results disclosed Tuesday, the company said supply-chain problems and a lack of tourism in North America continue to be challenging, while it is being hurt by temporary closures of its stores in Russia and Belarus. PVH said it expects $9 in earnings per share in fiscal 2022, while the consensus call among analysts tracked by FactSet was for $9.81. Revenue for the year ending January will grow by 2% to 3%, lower than the 4.3% increase analysts expected.

Analyst Kimberly Greenberger from Morgan Stanley, who downgraded the stock to Equal-weight from Overweight, said she sees few factors that could lift the shares in the near term, “particularly in light of the weaker macro environment, geopolitical issues in Europe, and rising inflation.” Greenberger slashed her price target to $89 from $122.

To be sure, the analyst does see an investor day scheduled for April 13 as a potential catalyst for the stock, particularly if management’s long-term margin guidance implies growth of over 10%. But that “likely suggests more opportunity for growth in 2023 and beyond, rather than in 2022,” she explained in a note. Greenberger thinks the stock will remain rangebound for now.

Wells Fargo‘s
Ike Bouchow, who is also neutral on the stock, maintained his rating but cut his price target to $95 from $110. He remains sidelined given uncertainty about when tourism in North America will recover, among other reasons. Sales to tourists accounted for 30% to 40% of North American sales, management said on Wednesday.

Credit Suisse‘s
Michael Binetti, meanwhile, stuck with an Outperform rating on the stock. “While we were disappointed by the magnitude of EPS headwinds, we see other areas of conservatism in the 2022 model,” he said, citing the potential for aggressive share repurchases and profitability in the US business. He cut his price target on the stock to $112 from $145.

Guggenheim analyst Robert Drbul reiterated his Buy rating on the stock, as well as his $130 price target. He believes PVH should be able to expand its margins as it benefits from consumers’ willingness to buy its clothing even if prices increase. The seller of Calvin Klein and Tommy Hilfiger apparel said it plans to pass cost increases it has encountered on to consumers in Europe and North America.

Eight analysts tracked by FactSet rate the stock at Hold, while eight rate it at Buy or Overweight. The average price target is $111.43.

Write to Karishma Vanjani at [email protected]

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Credit: www.marketwatch.com /

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