PVH Corp. (NYSE:PVH) was set to report FQ1 2015 earnings after the market closes on Wednesday, June 4th. PVH is an American clothing company which operates brands such as Tommy Hilfiger, Calvin Klein, Van Heusen, and IZOD. So far this year PVH stock has been somewhat volatile bouncing back and forth between a range of $114.10 and $138.94. This quarter Wall Street is expecting PVH’s quarterly sales to increase 4% compared to FQ1 of last year. However, earnings are forecast to fall significantly from the much stronger than predicted $1.91 per share posted last year driven by strength in Tommy Hilfiger and Calvin Klein. Here’s what investors are expecting from PVH on Wednesday.
The information below is derived from data submitted to the Estimize.com platform by a set of Buy Side and Independent analyst contributors.
The current Wall Street consensus expectation is for PVH to report $1.51 EPS and $1.981B revenue while the current Estimize.com consensus from Buy Side and Independent contributing analysts is $1.53 EPS and $1.997B in revenue. This quarter the buy-side as represented by the Estimize.com community is expecting PVH to beat the Wall Street consensus on both the top and bottom line by a small margin.
Over the previous 4 quarters for which data is available, the consensus from Estimize.com has been more accurate than Wall Street in forecasting PVH’s EPS and revenue 3 times each. By tapping into a wider range of contributors including hedge-fund analysts, asset managers, independent research shops, students, and non professional investors Estimize has created a data set that is more accurate than Wall Street up to 69.5% of the time.
More importantly, it does a better job of representing the market’s actual expectations. It has been confirmed by Deutsche Bank Quant. Research and an independent academic study from Rice University that stock prices tend to react with a more strongly associated degree to the expectation benchmark from Estimize than from the Wall Street consensus.
The magnitude of the difference between the Wall Street and Estimize consensus numbers often identifies opportunities to take advantage of expectations that may not have been priced into the market. Here we are seeing a smaller than usual differential between the two groups’ expectations compared to recent quarters.
The distribution of earnings estimates published by analysts on the Estimize.com platform range from $1.50 to $1.56 per share and from $1.987B to $2.009B in revenues. This quarter we’re seeing a relatively large range of estimates for PVH’s earnings.
The size of the distribution of estimates relative to previous quarters often signals whether or not the market is confident that it has priced in the expected earnings already. A wide range of estimates signals less agreement in the market, which could mean greater volatility post earnings.
Throughout the quarter the Wall Street EPS consensus fell from $1.79 to $1.51 while the Estimize consensus slipped from $1.54 to $1.53. Meanwhile the Wall Street revenue consensus declined from $2.003B to $1.981B while the Estimize consensus slid before the report from $1.999B to $1.997B. Timeliness is correlated with accuracy and downward analyst estimate revisions going into the report are often a bearish indicator.
The analyst with the highest estimate confidence rating this quarter is turbinecity who projects $1.53 EPS and $1.987B in revenue. turbinecity was our Winter 2014 season winner and is ranked 2nd overall among over 4,500 contributing analysts. Over the past 2 years turbinecity has been more accurate than Wall Street in forecasting EPS and revenue 59% and 54% of the time respectively throughout a massive 2,723 estimates.
Estimate confidence ratings are calculated through algorithms developed by deep quantitative research which looks at correlations between analyst track records and tendencies as they relate to future accuracy. In this case turbinecity expects PVH to report in-line with the Estimize EPS consensus but miss the the community’s revenue projection by $10 million.
On Wednesday contributing analysts on the Estimize.com platform are forecasting PVH to beat the Wall Street consensus by 2c per share on earnings and $16 million in sales. Disappointing recent results from Macy’s and Walmart have shown that the retail industry is still struggling, but the Estimize community has moderately higher expectations for PVH’s quarterly earnings report than the Street is giving credit for.