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Citi maintains Neutral rating on PVH Corp stock, cites uncertain F24 outlook

EditorEmilio Ghigini
Published 04/02/2024, 07:46 AM
Updated 04/02/2024, 07:46 AM

On Tuesday, Citi reiterated its Neutral rating for PVH Corp (NYSE:PVH) stock, maintaining a price target of $139.00. The firm acknowledged PVH's fourth-quarter performance, which surpassed both guidance and consensus expectations on revenue and earnings.

However, the future appears less certain as the company's forecast for fiscal year 2024 (F24) falls significantly short of market projections, with earnings per share (EPS) guidance set at $10.75 to $11.00, well below the consensus estimate of $12.11.

PVH management anticipates a sales decline of 6-7% for the year, a steeper drop than the consensus estimate of a 1% decrease. The first quarter is expected to see an 11% reduction in sales, which is notably lower than the estimated 3.7% consensus.

This suggests a substantial weakening in the company's performance in the first quarter. The press release also hints at a continued downturn in Europe, a region where the company had already observed some softness in the third quarter. Further details are expected to be revealed in the upcoming earnings call.

The company's operating margin is projected to remain flat in F24. While this may seem acceptable given the anticipated sales decline, it falls short of expectations that had been set for margin growth.

After the previous earnings call, investors had grown more optimistic about PVH's stock, fueled by management's comments suggesting that EBIT margin could increase even in a challenging sales environment. This latest guidance may temper investor sentiment as it indicates a less favorable outlook than previously hoped.

InvestingPro Insights

For investors and analysts keeping an eye on PVH Corp, recent data from InvestingPro offers a deeper dive into the company's financial health and stock performance. With a market capitalization of $8.33 billion and a P/E ratio standing at 16.47, PVH appears to be trading at a reasonable valuation given its near-term earnings growth prospects. Notably, the company has demonstrated a high return over the last year, with a 6-month price total return of an impressive 85.89%, and it's currently trading near its 52-week high, at 98.99% of this peak.

Furthermore, InvestingPro Tips highlight that PVH is expected to see net income growth this year, and the stock has been quite volatile, which could present opportunities for investors. Despite a challenging outlook, the company has maintained its dividend payments for 54 consecutive years, showcasing a commitment to returning value to shareholders. With these factors in mind, investors may find PVH's current position and future prospects worth considering.

For those interested in a more comprehensive analysis, InvestingPro provides additional insights and tips for PVH. By using the coupon code PRONEWS24, readers can get an extra 10% off a yearly or biyearly Pro and Pro+ subscription, which includes access to a total of 9 InvestingPro Tips for PVH, offering a broader perspective on the company's financial standing and market position.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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