“30% Rally” For PVH, says Jefferies, PVH Stock (NYSE:PVH) Surges

A potentially big upsurge may be coming to fashion stock PVH (PVH), as a new report out from Jefferies looks for that upswing to hit. In fact, Jefferies analysts are looking for around a 30% rally to hit, and it could be fairly soon. Investors took the hint and ran with it, sending shares of PVH racing up nearly 9% in Wednesday afternoon’s trading.

The word from Jefferies, via analyst Ashley Helgans, saw PVH stock get upgraded from Hold to Buy, and its price target get bumped up from its original $70 per share to a new $105. That represents a jump of just over 30% against Tuesday’s closing figures.

That is quite a change, but what drove it? According to Helgans, PVH’s retooling efforts of late should be paying off, as PVH “…has made meaningful progress in transitioning to a more focused, efficient, and strategic company.” Throw in a “compelling roadmap” and “high-caliber management” and PVH has the potential to produce improved results in the long term. The headwinds formerly hitting PVH have also largely been addressed, and despite a stumbling economy, a combination of “cost-saving work and buybacks” could be big for PVH.

Not Everyone is So Sure

But despite Helgans’ assertions, not everyone is convinced. In fact, some note that PVH may be a little more risky than some would think. While PVH does have an attractive price-to-earnings ratio of about 6.6—which is a far cry from the average, around 18, this could be hiding deeper risk, the reports note.

Earnings have been falling off, and in an environment where many other firms have seen growth. And if that continues, then shareholders are not likely to buy in further, keeping share prices repressed. Much of the ratio for PVH, reports note, is due to it trading on higher expected growth than the wider market. If that growth does not actually show, then there could be a much larger problem ahead.

Is PVH a Good Stock to Buy?

Turning to Wall Street, analysts have a Moderate Buy consensus rating on PVH stock based on seven Buys and six Holds assigned in the past three months, as indicated by the graphic below. After a 30.95% loss in its share price over the past year, the average PVH price target of $97.62 per share implies 11.86% upside potential.

See more PVH analyst ratings

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