PVH: Undervalued with Strong Growth Potential and Strategic Initiatives

Tom Nikic, an analyst from Needham, has initiated a new Buy rating on PVH (PVH).

Tom Nikic has given his Buy rating due to a combination of factors that suggest PVH is undervalued and poised for growth. He highlights the potential for significant earnings per share (EPS) growth in the coming years, particularly from bringing the GIII licenses in-house, which is expected to contribute over $1.00 in EPS by FY26/27. This potential growth is not yet fully recognized in current market estimates.
Additionally, Nikic points out that PVH’s focus on cost efficiency has been overshadowed by recent sales declines. However, with anticipated revenue growth, the company is likely to benefit from improved expense leverage. Furthermore, with PVH’s shares trading at a low multiple of projected FY25 earnings and generating substantial free cash flow, the company is in a strong position to repurchase a significant portion of its shares. He also notes minimal risks from tariffs and a stable outlook for upcoming earnings, supporting his positive view on the stock.

Nikic covers the Consumer Cyclical sector, focusing on stocks such as Foot Locker, On Holding AG, and Crocs. According to TipRanks, Nikic has an average return of 8.5% and a 48.70% success rate on recommended stocks.

In another report released on May 28, UBS also maintained a Buy rating on the stock with a $150.00 price target.