Reviewing PVH Corp PVH's first-quarter results, JPMorgan said the company achieved a retail rarity with its beat and raise quarter. The firm upgraded the shares of the company and also lifted its price target.
Giving the rationale for its upgrade, JPMorgan said:
- The deep-dive in Calvin Klein would translate into double-digit top-line growth for five-plus years.
- China is a material top and bottom-line opportunity for Tommy Hilfiger.
- No improvement is expected in the North American landscape through 2019.
- Strong balance sheet provides optionality.
Q1 Print
Analyst Matthew Ross, Grace Smalley, Anne Samuel and Steven Zaccone noted that the company reported first quarter adjusted earnings per share of $1.65 compared to the consensus estimate of $1.60, driven by 5 percent constant currency top-line growth and 178 basis point-expansion in margins.
Outlook
JPMorgan noted that the company raised its 2017 earnings per share guidance to $7.40–$7.50 from the previous $7.30–$7.40. The firm clarified that the high end of the management's second-quarter guidance suggests 10-percent earnings per share growth in the first half of 2017 and implying similar growth rate in the second half, despite suggesting a 1,440-basis-point sequential step-down in 2016 second-half growth.
Multi-year, the firm sees increased visibility to a sustainable double-digit bottom-line profile at PVH, as forex headwinds abate, with the combination of Calvin Klein's Europe self-help story and early innings Tommy China growth opportunity. This, according to the firm, equates to a compounding low-double-digit+ EPS growth story despite modeling North American revenues at negative low-single-digits through fiscal year 2019.
As such, JPMorgan upgraded shares of PVH to Overweight from Neutral and lifted its price target to $125 from $116.
At the time of writing, shares of PVH were rallying 5.20 percent to $107.35.
Related Links: McDonald's, PepsiCo, PVH: Fast Money Picks For May 25 12 Stocks To Watch For May 25, 2017© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Date | ticker | name | Actual EPS | EPS Surprise | Actual Rev | Rev Surprise |
---|
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.