PVH Corp (PVH) PT Lowered to $110 at TD Cowen

TD Cowen analyst John Kernan lowered the price target on PVH Corp (NYSE: PVH) to $110.00 (from $134.00) while maintaining a Buy rating.

The analyst commented: "Tommy and Calvin need to show more progress in the PVH+ plan. Investors want to see more consistency in the merchandising, marketing and the flow of EBIT and Free Cash Flow. There is a wide range of investor opinions on guidance, most of which assume EPS declining at least 5% to 10% y/y. Target to $110, 10x FY25E EPS. Reiterate Buy on turnaround potential at a trough valuation.

Initial guidance was issued for FY25E that looks for a return to topline organic growth and progression along PVH's path to a mid-teens long-term adj. operating margin. This outlook implies a reversal from Q4:24's and FY24's sales decline of 7%. We are modeling FY25E revenue of -1% y/y. Quality of sales initiatives were a 500bp headwind to FY24 while spot FX is a smaller headwind than previously feared in Jan/Feb.

With multiples aSpecialty Retail near five-year lows, it begs the question what is the next evolution in a category that faces increasing competition and uncertain supply chain/trade policy. We want to see more DTC elevation globally. PVH troughed at 5x FY2 P/E in the Fall of 2022 vs the current valuation of 6x - this compares to the peak of 9x in early FY24."

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