Back to top

Analyst Blog

Zacks Equity Research

PVH Corp. Scales 52-Week High: Should You Hold the Stock?

RL GES PVH DFBG

Trades from $3

Have you taken advantage of PVH Corp.’s (PVH - Free Report) bull-run yet? If not, you must take a look at the owner of Calvin Klein and Tommy Hilfiger brands, which has seen its stock price surge by a whopping 51.7% on a year-to-date basis, gaining from its superior brands, splendid earnings history, strategic growth efforts and robust financials.

In fact, we believe that these factors helped the textile-apparel designer and marketer to hit a 52-week high of $112.61 on the last trading day, before eventually closing at $111.54.

PVH CORP Price and Consensus
 

PVH CORP Price and Consensus | PVH CORP Quote

Starting with the company’s robust brand structure, we note that PVH Corp.’s diversified brand portfolio allows it to stay ahead of its peers to generate above-average industry growth and sustain its position amid the current challenging environment. The company’s approach to brand management assists each of its brands to develop further through efficient marketing strategies, financial control and operating leverage.

Based on its brand strength and opportunities with regard to distribution, we believe that the company is poised for long-term growth. Moving to PVH Corp.’s strategic initiatives, the company has been focused on higher-margin businesses. To this end, the company shut down its Izod retail division as the unit’s unviable business model did not generate optimum returns. Moreover, it has divested all assets of its underperforming division, G.H. Bass & Co and acquired The Warnaco Group Inc.

We believe that these growth drivers also helped the company to post its ninth consecutive earnings beat in the second quarter of fiscal 2016, wherein both top and bottom lines grew year over year, mainly driven by continued strength in its Calvin Klein and Tommy Hilfiger brands. Further, management raised its earnings per share guidance for fiscal 2016, as it remains confident of its solid business strategies and ongoing investments in top-quality brands.

These factors indicate that the company is well positioned to maintain its upbeat performance, going forward, which should instill confidence among investors of this Zacks Rank #3 (Hold) stock. If this is not enough, they can take a look at PVH Corp.’s financials and shareholder-friendly moves.

PVH Corp.’s healthy balance sheet provides it with the financial flexibility to drive future growth. The company’s ability to generate a strong operating cash flow has helped in the execution of its long-term strategies such as global expansion, product enhancement and brand offerings, and building of operational infrastructure. Moreover, PVH Corp.’s financial strength is evident from its ongoing share repurchase program extending over a three-year period.

All these highlight PVH Corp.’s solid potential and indicate that there is still room for growth for this company with a long-term EPS growth rate of 11%. Thus, if you haven’t noticed PVH Corp. yet, remember – better late than never!

Stocks to Consider

Investors can consider better-ranked stocks like Differential Brands Group Inc. (DFBG - Free Report) , Guess', Inc. (GES - Free Report) and Ralph Lauren Corporation (RL - Free Report) , each with a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Differential Brands, with a long-term EPS growth rate of 15%, has seen positive estimate revisions for 2016, over the past 60 days.

Guess has to its credit a long-term EPS growth rate of 16.3% and positive estimate revisions over the past 30 days, which help it stand strong against the industry.

Ralph Lauren has outperformed earnings estimates consistently in the last four quarters, with an average beat of 10.1%. Further, estimates for the current fiscal have witnessed an uptrend in the last 60 days.

Confidential from Zacks

Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>  


In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

RALPH LAUREN CP (RL) - free report >>

GUESS INC (GES) - free report >>

PVH CORP (PVH) - free report >>

DIFFERENTIAL BG (DFBG) - free report >>