What Happened?
Shares of fashion conglomerate PVH (NYSE: PVH) jumped 2.8% in the afternoon session after the company received positive coverage from Wall Street analysts.
The apparel company holds a consensus rating of 'Moderate Buy' from the sixteen brokerages covering the stock. Notably, Barclays increased its price target on PVH from $83.00 to $101.00 and assigned an 'overweight' rating. Further bolstering the positive sentiment, Needham & Company LLC also reiterated a 'buy' rating with a $115.00 price target. The collection of favorable analyst reports appears to be fueling investor optimism and driving the shares higher.
After the initial pop the shares cooled down to $83.32, up 2.7% from previous close.
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What Is The Market Telling Us
PVH’s shares are somewhat volatile and have had 13 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 19 days ago when the stock dropped 3.1% as investors looked past the company's second-quarter revenue and earnings beat to focus on shrinking profitability.
The owner of Calvin Klein and Tommy Hilfiger reported revenue of $2.17 billion, up 4.5% year-over-year and ahead of Wall Street's expectations. However, the company's profitability showed signs of strain. Adjusted earnings per share, while beating estimates at $2.52, declined from $3.01 in the same quarter last year. More significantly, the company's operating margin contracted to 6.1% from 8.4% a year ago, indicating that expenses grew faster than sales.
Additionally, adjusted EBITDA of $201.9 million missed analyst consensus estimates by 4.8%, signaling underlying weakness in core profitability that likely concerned investors.
PVH is down 20.5% since the beginning of the year, and at $83.32 per share, it is trading 26.2% below its 52-week high of $112.86 from December 2024. Investors who bought $1,000 worth of PVH’s shares 5 years ago would now be looking at an investment worth $1,175.
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