PVH Corp (PVH) Remains Top Pick at UBS; Sees Plenty of Levers to Offset Weak Industry Trends

UBS analyst Michael Binetti reiterated a Buy rating and $132 price target on PVH Corp (NYSE: PVH) saying it remains a Top Pick. The analyst sees plenty of levers to offset pressured US industry trends.

Binetti commented, "We believe PVH's stock has digested most 2Q industry read-thru's as net negative—and we believe they're net positive.

1) Trends in Europe are improving (per RL/Hugo, Eur: ~25% of PVH revs).

2) Denim is the most consistent positive industry call out; CK jeans has margins ~10pp below normal, AUR's are up, and retailers are adding footage (which we think drove outperformance even at Macy's despite -2.1% SSS); &

3) Improving men's apparel trends at JCP (where PVH has higher margins vs Macy's, on our ests).

"Our intra-qtr PVH meetings increased our confidence in a beat/raise outlook thru '15 w/mult sources of EPS upside & P/E expansion (as license rollups re-start) to continue to drive stock outperformance amidst pressured US apparel industry trends," the analyst said.

For an analyst ratings summary and ratings history on PVH Corp click here. For more ratings news on PVH Corp click here.

Shares of PVH Corp closed at $114.98 yesterday.

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