Analyst Christopher Nardone from Bank of America Securities reiterated a Hold rating on PVH and decreased the price target to $87.00 from $88.00.
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Christopher Nardone has given his Hold rating due to a combination of factors that balance current challenges with potential future gains. The valuation of PVH at 5x EV/EBITDA reflects a fair balance between near-term margin pressures and the possibility of longer-term margin improvements through cost savings. The company’s third-quarter earnings exceeded expectations, largely due to a shift in marketing expenses, but the guidance for the fourth quarter appears softer than anticipated. This mixed performance has led to a slight adjustment in future earnings estimates and a marginal reduction in the price objective.
In addition, the performance in the EMEA region has been underwhelming, with sales declining due to various challenges, including a tough consumer environment and operational issues. However, there are positive signs in the Asia Pacific region, where sales trends are improving, particularly in China, which is significant for the company’s profitability. Despite these regional variances, the overall margin recovery is contingent on PVH’s ability to enhance full-price selling, which remains uncertain given the current market conditions in EMEA.
In another report released yesterday, J.P. Morgan also reiterated a Hold rating on the stock with a $83.00 price target.