UBS Raises Price Target on PVH Corp. (PVH) to $125; Reiterates Buy

August 26, 2016 9:17 AM EDT
Get Alerts PVH Hot Sheet
Price: $105.10 -0.45%

Rating Summary:
    15 Buy, 5 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 0 | Down: 0 | New: 0
Trade PVH Now!
Join SI Premium – FREE

Get inside Wall Street with StreetInsider Premium. Claim your 2-week free trial here.

UBS reiterated a Buy rating on PVH Corp (NYSE: PVH), and raised the price target to $125.00 (from $115.00), following the company's 2Q earnings report.

Analyst Michael Binetti commented, "We think the EPS upside opportunity from improving 2H GMs is underappreciated: 1) FX pressure abates in 2H (especially in 4Q, we est FX pressure diminishes to ~-80bp YOY from -220-240bp YOY in 1H); 2) GM compares get 150bp easier in 2H16 (vs. 1H16); 3) US d-store inventories are much cleaner—which should reduce industry promotional pressure; 4) a higher YOY mix of sales from high-GM businesses (TH China & GIII license). We’re modelling GMs +135bp YOY in 3Q & +195bp in 4Q (vs. +90bp & +50bp in 1Q & 2Q). Importantly, ’16 guidance for GMs at 53% implies SG&A dollars will increase by ~10% YOY in 2H vs. guidance for 2H revs to be up just +2%—making SG&A guidance look conservative. PVH remains the most visible beat & raise story in apparel in 2H. We’re raising our ’16E EPS to $6.75 (from $6.65), based on 1) revs +3% ex-FX (CK +7%; TH +5%); 2) GMs +120bp; 3) 180bp of SG&A deleverage."

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 $107.37 yesterday.

Serious News for Serious Traders! Try Premium Free!

You May Also Be Interested In

Related Categories

Analyst Comments, Analyst EPS Change, Analyst EPS View, Analyst PT Change

Related Entities

UBS, Earnings

Add Your Comment