PVH (PVH – Research Report), the Consumer Cyclical sector company, was revisited by a Wall Street analyst yesterday. Analyst Simeon Siegel from BMO Capital maintained a Hold rating on the stock and has a $93.00 price target.
Simeon Siegel has given his Hold rating due to a combination of factors surrounding PVH’s recent performance and future outlook. Despite PVH reporting an earnings per share (EPS) beat, driven by better-than-expected top-line results and selling, general, and administrative (SGA) expenses, the company’s gross margins contracted significantly. This contraction was attributed to increased promotional activities, an unfavorable channel mix, and higher freight costs, placing PVH’s performance near the bottom of its peer group.
Additionally, while management has introduced full-year EPS guidance above Street expectations, the company’s EBIT margins have declined year-over-year, primarily driven by international performance. The inventory levels remain high, reflecting core investments and lean levels from the previous year. Although PVH has shown resilience with its major brands, Calvin Klein and Tommy Hilfiger, there is a belief that Calvin Klein may have reached a revenue peak, suggesting a need for a greater focus on profitability over sales growth. These mixed signals contribute to the Hold rating until further evidence of the company’s ability to expand is observed.
In another report released yesterday, Bank of America Securities also maintained a Hold rating on the stock with a $92.00 price target.
PVH’s price has also changed moderately for the past six months – from $100.830 to $64.640, which is a -35.89% drop .