PVH, the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst John Kernan from TD Cowen downgraded the rating on the stock to a Hold and gave it a $74.00 price target.
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John Kernan has given his Hold rating due to a combination of factors affecting PVH’s current market position. The company faces structural risks from increased competition, rising inventory levels, and tariffs, which are compounded by weakening data in the wholesale channel. Additionally, there has been no inflation in the category since FY22, which poses pricing risks. The recent expansion in sector valuation also diminishes optimism about market sentiment and positioning.
Moreover, PVH’s marketing expenditure is relatively low compared to its peers, which could hinder its ability to compete effectively, especially in Europe where Tommy Hilfiger is losing market share. The increasing tariff rates on apparel sourcing require PVH to make additional pricing adjustments, impacting future earnings estimates. Despite a cheaper valuation, PVH’s shares are trading at a premium compared to other specialty apparel peers, with a return on invested capital that is among the lowest in the sector.
Based on the recent corporate insider activity of 53 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of PVH in relation to earlier this year.