PVH Attains New 52-Week High - Analyst Blog
January 16 2013 - 8:10AM
Zacks
Shares of PVH
Corp.(PVH) reached a new 52-week high of $119.62 on
Tuesday, Jan 15, 2013, beating its previous 52-week high of
$119.37. The closing share prices of the world’s largest shirt and
neckwear company, on Jan 15, 2013, was $119.45, representing a
solid return of approximately 68.0% since Jan 3, 2012. Average
volume of shares traded over the last 3 months stands at
approximately 1,023,710.
Growth Drivers
An impressive record of beating the
quarterly earnings expectations, a positive fiscal 2012 outlook,
and expanding business through acquisition, are the major growth
drivers for the shares of PVH Corp.
On Nov 27, 2012, PVH reported an
outstanding bottom-line performance in the third quarter of fiscal
2012. Driven by solid improvement in margins along with a lower tax
rate, the company’s adjusted earnings per share jumped
approximately 24% year over year to $2.34, beating the Zacks
Consensus Estimate of $2.29.
However, the company’s total
revenue inched down 1% to $1.643 billion compared with $1.654
billion in the year-ago quarter. The year-over-year revenue growth
at the company’s Tommy Hilfiger and Calvin Klein segments were more
than offset by the decline at its Heritage Brands segment and
unfavorable foreign currency exchange rates. However, quarterly
revenue surpassed the Zacks Consensus Estimate of $1.638
billion.
Bolstered by continued growth
momentum at Tommy Hilfiger and Calvin Klein brands, the company
raised its fiscal 2012 earnings guidance range to $6.37-$6.38 per
share, up from previous guidance range of $6.32-$6.37. The current
Zacks Consensus Estimate for the fiscal is pegged at $6.39 per
share which is above the company’s guidance range. Moreover, PVH
Corp. expects net sales to increase 2% from fiscal 2011 level.
Further, we believe that the
acquisition of The Warnaco Group, Inc. (WRC) will
facilitate the company to have operations at every major consumer
market in the world, which will ultimately boost its top line. It
is expected that the acquisition will increase the company’s 2013
earnings by 35 cents per share.
Valuation Stretched, Yet
Lucrative
PVH Corp. currently trades at a
forward P/E of 18.70x, reflecting a 18.0% premium to the peer group
average of 15.85x. Its price-to-sales ratio of 1.42 is also at a
premium to the peer group average of 1.34. Given the company’s
compelling fundamentals, the premium valuation is justified and
well supported by its long-term estimated EPS growth rate of 14.5%
versus 12.6% for the peer group.
About The
Company
PVH Corp., formerly known as
Phillips-Van Heusen Corporation, is headquartered in New York. PVH
Corp. designs and markets branded dress shirts, neckwear,
sportswear, footwear and other related products. The company
markets its products at a wholesale level through department store
chains and directly to consumers through retail stores. The
company's portfolio of brands includes its owned brands and its
licensed brands. The company has a market cap of approximately
$8.44 billion.
PVH Corp., which competes with
Ralph Lauren Corporation (RL), currently, has a
Zacks Rank #2 (Buy) rating. However, given the sluggish domestic
economic growth coupled with the crisis in Europe and slowdown in
China, we remain slightly cautious on the stock and uphold our
long-term ‘Neutral’ recommendation.
PVH CORP (PVH): Free Stock Analysis Report
RALPH LAUREN CP (RL): Free Stock Analysis Report
WARNACO GRP INC (WRC): Free Stock Analysis Report
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