Wells Fargo Resumes PVH Corp (PVH) at Outperform
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Wells Fargo resumes coverage on PVH Corp (NYSE: PVH) with a Outperform rating and a valuation range of $125-$127.
Analyst Ike Boruchow commented, "We are resuming coverage of PVH, with a new analyst, an Outperform rating and a valuation range of $125-$127. In a late-cycle retail world filled with broken/slowing fundamental stories, we view PVH as a standout--with company-specific drivers in place across multiple brands and geographies that can continue to deliver relatively impressive results. Specifically, we view the Calvin Klein brand as the largest opportunity going forward (CK averaging 14-15% CC "constant currency" growth the past 12 months), with meaningful prospects in key geographies (we see opportunity to triple European sales from here) and categories (seeing momentum in revamped denim category in NA/Europe). With CK recently adding a new Chief Creative Officer (Raf Simons, formerly of Christian Dior), we think this should only accelerate the evolution of the product/image globally. While we don't see quite as much growth from the Tommy Hilfiger brand, TH also has a handful of drivers in hand, including strong momentum in Europe (comping high-single-digits today), the recently acquired TH China business (and meaningful opportunities with other licensees) and margin enhancing initiatives like the licensing of their NA women's sportswear business to GIII (begins in Q4). All in, we see continued top-line growth from CK (potential for high-single digit "HSD") and TH (potential for mid-single digit "MSD")--a function of core organic growth and strategic acquisitions--while GM drivers related to improving pricing ("AURs", primarily across denim) and geographic mix (international sales +8% YTD vs. NA +3%) and share repurchases can all drive 10-15% bottom-line for the next few years in our view. Our 2016/2017 EPS estimates are $6.65/$7.50."
Shares of PVH Corp closed at $107.15 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, New Coverage
Related EntitiesWells Fargo, Ike Boruchow
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