2. PVH Corp (NYSE:PVH)
Upside from Current Levels: 32.26%
PVH Corp (NYSE:PVH) boasts international brands such as Tommy Hilfiger, Calvin Klien, Warner’s, Olga, and True & Co. in its portfolio. The company also licenses brands such as Michael Kors and Kenneth Cole New York. Its brands target fashion-forward audiences, with Calvin Klien focusing on minimalistic aesthetics and Tommy Hilfiger encompassing the classic American style.
The company is expanding its global presence and recently opened its global flagship store on one of the most celebrated fashion avenues in the world: Paris’ Champs-Élysées. Expanding its consumer engagement, PVH Corp (NYSE:PVH)’s brand Tommy Hilfiger recently joined hands with Mercedes-AMG Petronas Formula One™ Team to launch a limited edition line. Tommy Hilfiger also announced a multi-year partnership with the United States SailGP Team in June, becoming their Official Lifestyle Apparel Partner and ushering in a new era of Tommy Hilfiger’s blend of style and athleticism.
The company operates around 700 outlet stores under the brands Tommy Hilfiger, Calvin Klein, and Van Heusen. As one of the largest global lifestyle companies, PVH Corp (NYSE:PVH) operates in more than 40 countries under 29,000 associates, with the purpose of making Calvin Klein and TOMMY HILFIGER the most desirable lifestyle brands in the world.
FPA Queens Road Small Cap Value Fund stated the following regarding PVH Corp. (NYSE:PVH) in its first quarter 2024 investor letter:
“PVH Corp. (NYSE:PVH) is an apparel company that owns the Tommy Hilfiger and Calvin Klein brands globally. Most of PVH’s earnings come from Europe, where the Tommy and Calvin brands are considered “almost luxury” and PVH has generally recorded high single-digit organic growth with demonstrated pricing power during the preceding decade. CEO Stefan Larsson has done an excellent job revitalizing the company and improving margins at PVH’s moribund U.S. operations. Over the past year, PVH and our other apparel companies have performed well as the worst fears for consumer spending didn’t play out. PVH has become a top five holding for us and our apparel holdings (PVH, GIII, LEVI and DECK) now make up almost 10% of the portfolio. On April 2, post quarter end, PVH announced fiscal 23Q4 results where they missed on earnings guidance for the coming year. The stock is down ~20% from its high but now trades at less than ten times forward earnings. We have held our position.”
PVH Corp (NYSE:PVH)’s revenue grew at a CAGR of 4.63% over the last three years. Analysts estimate the company’s EPS to increase at a 6.22% year-over-year growth rate by 2025. The stock sports a consensus Buy rating among analysts, with potential for growth due to its positive consumer engagement and direct-to-customer (DTC) sales. Its median price target of $103.5 represents an upside of 32.26% from current levels, and it is currently trading a P/E ratio of 9.24 at a massive 40.65% discount to its sector. PVH Corp (NYSE:PVH) has 39 hedge funds as of Q2 2024, with Pzena Investment Management holding the highest stake.
