Wall Street Bullish On PVH After Apparel Retailer Beats Q4 Estimates

PVH Corp PVH reported after the close Wednesday with fourth-quarter results that included a top-and-bottom-line beat, helping to push shares higher. Here's what some sell-side analysts are saying after the apparel congolomerate's print.

The Analysts

• The Buckingham Research Group's Eric Tracy maintains a Buy rating on PVH's stock with an unchanged $176 price target.
• Credit Suisse's Michael Binetti maintains an Outperform rating on PVH's stock with a price target lifted from $175 to $178.
• Deutsche Bank's Tiffany Kanaga maintains a Buy rating on PVH's stock with a price target lifted from $175 to $179.

Buckingham: Reasons To Remain Bullish

Expectations heading into PVH's earnings report were high and the company delivered a "quality" beat with "solid" guidance, Buckingham's Tracy said in a note. Digging beyond the headline numbers, PVH's Calvin Klein and Tommy Hilfiger brands performed well due to an increase in brand investments and improved quality of its products in both the domestic and international markets.

PVH's order book points to continued momentum into fiscal 2018, and the company's more than $3 EPS drag from foreign exchange rates should shift to an estimated tailwind benefit of 35 cents per share, the analyst said.

Related Link: 2 Reasons Deutsche Turned Bullish On PVH Corp

Credit Suisse: Conservative Guidance

PVH guided its fiscal 2018 revenue to be higher by 4 percent, excluding foreign exchange, which appears to be conservative, Credit Suisse's Binetti said in a research report. PVH guided its Q1 revenue to be higher by 9 percent, which implies a revenue growth deceleration for the rest of the year to 3 percent, the analyst said. 

A deceleration in revenue after Q1 appears unlikely due to the following, Binetti said:

• Ongoing momentum across multiple brands.
• An acceleration in leading indicators in the bottom half of 2018, including fall and winter backlogs.
• An incremental $450 million in SG&A invested in 2017, which should drive growth.

Deutsche Bank: 'Sweet End' To 2017

PVH's earnings report marks a "sweet end" to 2017 with momentum that should carry over into 2018, based on EPS guidance that's 15 cents ahead of the Street's estimate at the midpoint, Kanaga said in a note. PVH's streak of beat-and-raise quarters now stands at 15, and there is no reason to believe this trend won't continue throughout 2018, the analyst said. 

Price Action

Shares of PVH were trading higher by more than 5 percent at the time of publication Thursday afternoon. 

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