PVH is the IBD Stock of the Day as its earnings outlook improves. PVH stock extended its rebound from a key level Wednesday, offering an early entry.
Calvin Klein Owner Turns Around
Analysts say the Calvin Klein and Tommy Hilfiger parent has made significant progress on its turnaround plan, despite challenging industry and macroeconomic conditions.
On Tuesday, analyst John Kernan of TD Cowen maintained a buy rating on PVH stock, while hiking the price target to $165.00.
Kernan cited PVH's strong European presence amid the potential for improving global profits. The analyst also like its restructuring efforts to improve margins and lower inventories, which is driving earnings growth.
"We continue to see incredible strength in our iconic brands as we tap into their beloved DNA," PVH CEO Stefan Larsson said in the company's latest earnings release.
PVH Stock Rebounds In Strong Trade
Shares rose nearly 4% to 137.40 in above-average volume on the stock market today. PVH stock on Wednesday built on Tuesday's bounce from the 50-day moving average.
The 50-day bounce offers a follow-on buying opportunity. The pullback to support ended just above the high of a prior consolidation, a sign of strength.
A slew of share price gains in high volume before that consolidation triggered the ants indicator, a new tool for MarketSurge subscribers. And the relative strength line is just below the March 4 high.
IBD added the retail stock to SwingTrader Wednesday as it held above its 21-day exponential moving average. Shares regained that short-term support level Tuesday.
PVH stock flourishes a superior RS Rating of 94. That means it has outperformed 94% of all stocks in IBD's database over the past year.
PVH peer Gildan Activewear surged nearly 11% Wednesday on buyout buzz.
PVH Earnings
In November, PVH delivered a quarterly beat-and raise earnings report. The apparel retailer is set to next report for its fiscal fourth quarter on April 1, after the market close.
A challenging few years weighs on the EPS Rating, a 39 out of 99. But earnings are on the rebound.
Analysts project a 17% EPS gain in fiscal 2023 and a further 15% gain in 2024, FactSet shows. The fiscal year ends in January
The top line remains challenging. Revenue should return to 1% growth in 2023 and then dip 1% next year.
But PVH touts "significantly improved profitability" as it restructures. The turnaround plan hinged on e-commerce and efficiency gains, including 10% global job cuts.
In Q3, Tommy Hilfiger revenue rose 4%. Calvin Klein revenue grew 6% during the quarter.
Formerly known as a maker of midtier men's shirts, PVH transformed itself with two big acquisitions. It purchased fashion brand Calvin Klein in 2003 and Tommy Hilfiger in 2010.
