PVH Corp Looks Undervalued: Is Now the Time to Buy the Stock?

PVH Corporation PVH is currently trading at a discount compared with its industry benchmarks. The stock trades at a forward 12-month price-to-earnings (P/E) ratio of 5.49X, lower than the industry’s average of 10.86X. Adding to its appeal, PVH holds a Value Score of A, reflecting strong fundamentals and positioning it as an attractive opportunity for long-term, value-focused investors.PVH’s P/E Ratio (Forward 12 Months) Image Source: Zacks Investment Research While some investors are still weighing PVH’s near-term upside, the stock’s recent momentum and solid fundamentals suggest it may be poised for continued gains.The PVH stock has gained 6.5% in the past month compared with the industry and the S&P 500’s growth of 9.1% and 12.3%, respectively.PVH Stock's Past One-Month Performance Image Source: Zacks Investment Research Decoding Factors Behind PVH’s Stock PerformancePVH Corp’s diversified brand portfolio continues to serve as a cornerstone of its competitive advantage, enabling it to outperform industry peers and sustain growth even in a volatile and evolving retail landscape. The company’s disciplined approach to brand management, anchored in strategic marketing, strong financial controls and operating efficiencies, has created a solid foundation for long-term value creation.At the core of PVH’s success are its two flagship brands: Calvin Klein and TOMMY HILFIGER. These brands are not only globally recognized but also enjoy strong emotional connections with consumers, which the company has leveraged through effective direct-to-consumer initiatives, digital innovation and strategic expansion across markets. In the fourth quarter of fiscal 2024, the combined performance of Calvin Klein and TOMMY HILFIGER resulted in low single-digit revenue growth on a reported basis and mid-single-digit growth when excluding the 53rd week, signaling solid momentum despite macroeconomic pressures.PVH Corp is taking proactive cost and efficiency measures to navigate a challenging environment while investing in long-term growth, particularly in China. In North America, it aims to sustain double-digit EBIT margins in fiscal year 25 through strong execution of the PVH+ Plan. In Europe, growth is expected from improvements in product, marketing and marketplace execution, with a focus on strengthening both D2C and wholesale. Asia is projected to deliver long-term growth, and the licensing business is set to achieve high-quality growth, especially in the 80% outside its G-III alliance.PVH Corp’s multi-year PVH+ Plan focuses on driving sustainable growth by leveraging its core strengths and enhancing consumer connection with Calvin Klein and TOMMY HILFIGER. The strategy centers on five key drivers: winning with product, consumer engagement, digital marketplace leadership, data-driven operations and efficiency-led investment. The company aims to expand in high-demand global markets, strengthen brand relevance, and accelerate digital and D2C growth through an integrated distribution approach.Challenges Impacting PVH StockPVH Corp is grappling with a challenging operating environment marked by macroeconomic uncertainty, particularly in North America and China. The company faces pressure from weakened U.S. consumer demand and has been affected by its recent addition to China’s MOFCOM unreliable entity list, an unprecedented move for a global consumer brand. This is expected to create a temporary margin headwind, especially pronounced in the first half of fiscal 2025.For the fiscal first quarter, PVH Corp expects revenues to be flat to down 2% year over year (or flat to down 1% in constant currency). Gross margin is projected to decline by roughly 250 basis points due to higher freight costs, increased discounting due to Calvin Klein product delays, and a greater mix of lower-margin wholesale revenues. Operating margin is expected to be between 8 and 8.5%, down 150-200 basis points (bps) from the prior year.Non-GAAP EPS is forecasted at $2.10-$2.25, below the $2.45 reported in the year-ago quarter, including a five-cent negative impact from currency. Interest expense is expected to rise to $20 million, versus $18 million in first-quarter fiscal 2024. For the full fiscal year, PVH anticipates a 100-bps decline in gross margin, interest expenses of about $85 million (up from $67 million), and an effective tax rate of 22%. Currency movements are expected to negatively impact fiscal EPS by around 20 cents.What is the Best Approach for PVH?PVH is well-positioned for sustainable growth, provided it continues to execute its PVH+ Plan with a focus on brand leadership, operational efficiency and disciplined financial management. However, macroeconomic uncertainties, shifting consumer preferences and geopolitical risks could pose challenges to sustained growth. PVH currently carries a Zacks Rank #3 (Hold).Key PicksWe have highlighted three better-ranked stocks, namely, Under Armour UAA, G-III Apparel Group, Ltd. GIII and Duluth Holdings DLTH.Under Armour is one of the leading designers, marketers and distributors of authentic athletic footwear, apparel and accessories for a wide variety of sports and fitness activities in the United States and internationally. It has a Zacks Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.The Zacks Consensus Estimate for UAA’s fiscal 2024 sales and earnings indicates declines of 9.8% and 44.4%, respectively, from the year-ago reported figures. Under Armour delivered an earnings surprise of 98.6% in the trailing four quarters, on average.G-III Apparel is a manufacturer, designer and distributor of apparel and accessories under licensed brands, owned brands and private label brands. It currently carries a Zacks Rank #2.The Zacks Consensus Estimate for GIII’s fiscal 2025 earnings and revenues implies declines of 4.5% and 1.2%, respectively, from the year-ago actuals. The company delivered a trailing four-quarter average earnings surprise of 117.8%.Duluth Holdings, a casual wear, workwear and accessories dealer, carries a Zacks Rank #2 at present. The company has a trailing four-quarter earnings surprise of 37.2%, on average.The Zacks Consensus Estimate for DLTH’s current financial-year EPS indicates growth of 5.6% from the year-ago figureOnly $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report PVH Corp. (PVH): Free Stock Analysis Report G-III Apparel Group, LTD. (GIII): Free Stock Analysis Report Duluth Holdings Inc. (DLTH): Free Stock Analysis Report Under Armour, Inc. (UAA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks