On Monday, JPMorgan included PVH Corp. (NYSE:PVH) stock, the parent company of brands such as Calvin Klein and Tommy Hilfiger, in its Analyst Focus List. The firm has raised its expectations for the company's future earnings per share (EPS), citing a more robust growth outlook than the broader analyst community.
The firm projects a fiscal year 2024 EPS of $10.96 for PVH, slightly above the consensus estimate of $10.95. Looking further ahead, JPMorgan has increased its fiscal year 2025 EPS forecast to $14.53, which is 15% higher than the street's expectation of $12.51. This adjustment is based on an anticipated year-over-year revenue growth of 2%, compared to the street's projection of 3%, and operating margins of 12.6% versus the consensus of 10.8%.
For fiscal year 2026, JPMorgan's analysis suggests that PVH could achieve an EPS of $17.57, nearly 25% above the current consensus of $14.22. This prediction assumes a margin profile of 14.0%, compared to the street's forecast of 11.3%. Additionally, the analysis indicates that every $100 million of share repurchases could contribute an additional $0.15 to the company's EPS.
In terms of valuation, JPMorgan has referenced PVH's pre-pandemic historical multiple of 9 times, derived from department stores and specialty softlines top-line/margin regression output. Applying this multiple to the firm's forecasted fiscal year 2025 EBITDA leads to a projected equity value of $193 for PVH Corp.
The inclusion of PVH Corp. in JPMorgan's Analyst Focus List and the upward revision of EPS forecasts reflect a positive outlook for the company's financial performance in the coming years.
InvestingPro Insights
Following JPMorgan's optimistic outlook for PVH Corp., current metrics from InvestingPro reinforce the potential of the company. With a market capitalization of $6.27 billion and an attractive price-to-earnings (P/E) ratio of 9.97, PVH appears to be valued efficiently in the market. Notably, the adjusted P/E ratio for the last twelve months as of Q4 2024 stands even lower at 8.93, suggesting a potentially undervalued stock.
InvestingPro Tips highlight that management's aggressive share buyback strategy and the company's high shareholder yield could be key drivers of future stock performance. Additionally, the stock's oversold status according to the Relative Strength Index (RSI) suggests that there may be a buying opportunity for investors. It's worth noting that PVH has maintained dividend payments for an impressive 54 consecutive years, which speaks to its financial stability and commitment to returning value to shareholders.
To gain further insights and access additional InvestingPro Tips for PVH Corp., investors can explore the detailed analysis available on InvestingPro. With 11 more tips to consider, there's a wealth of information to help make informed decisions. Remember to use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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