PVH Corp Touches A 52-Week High: Is There More Room To Run?

Shares of PVH Corp. (NYSE:PVH) have been flying high on robust growth drivers, solid brand strength and impressive surprise history. Additionally, management expects to deliver robust revenues and earnings in the fourth quarter. Further, the company raised its guidance for fiscal 2017 driven by sturdy third-quarter results and continued strength across its brands.

Consequently, this New-York based company scaled a 52-week high of $151.36 yesterday, though it closed marginally lower at $151.08. In a year’s time, the company’s shares surged a whopping 59.3%, substantially outpacing the Textile-Apparel industry’s gain of 14.8% and the S&P 500’s growth of 24.6%. Currently, the industry ranks amongst the top 30% of all Zacks industries (78 out of 256). Also, the stock has rallied 10.2% year to date.

In the last seven days, PVH Corp. has witnessed upward earnings estimate revisions as well, thus reflecting analysts’ bullish sentiment surrounding the stock. The Zacks Consensus Estimate of $1.44 for the fourth quarter and $7.80 for fiscal 2017 has moved north by a penny each in the said time frame. Management envisions fiscal 2017 adjusted earnings per share in the range of $7.78-$7.80.

Let’s Delve Deeper

PVH Corp. has been delivering robust performance for quite some time now. This is evident from the company’s positive earnings surprise in 13 of the last 14 quarters. Further, it marked fifth consecutive sales beat in third-quarter fiscal 2017. Also, the company has been gaining from solid momentum at its premium Calvin Klein and Tommy Hilfiger brands, particularly in the international regions.

Additionally, PVH Corp. has been undertaking significant steps to keep pace with the evolving retail trends and integrate consumers’ changing preferences into operating decisions, thereby aiding it to stay afloat in a tough operating environment. The company’s strategic deals to enhance supply-chain network, develop its omni-channel operations, making innovations are likely to boost performance. Moreover, the company’s healthy balance sheet provides it with the financial flexibility to drive growth in the future.

However, PVH Corp.’s significant international presence as well as outlets in various tourist destinations across the United States exposes it to foreign currency risks. In fact, currency headwinds have been hurting the company’s results for a while now. While currency rates are expected to improve in the fourth quarter, it is likely to hurt fiscal 2017 earnings by 17 cents per share. Alongside, the company expects volatility in the overall retail environment and unpredictable global consumer spending to remain major challenges.

Nonetheless, PVH Corp. has a Zacks Rank #3 (Hold). Long-term earnings growth rate for the company is pegged at 13%.

Do Textile-Apparel Stocks Grab Your Attention, Count on These

Some better-ranked stocks in the same industry include Tailored Brands, Inc. (NYSE:TLRD) , Michael Kors Holdings Limited (NYSE:KORS) and G-III Apparel Group, Ltd. (NASDAQ:GIII) . While Tailored Brands sports a Zacks Rank #1 (Strong Buy), Michael Kors and G-III Apparel carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Tailored Brands with a long-term earnings growth rate of 16.5% has delivered an average positive earnings surprise of 7.7% in the trailing four quarters.

Michael Kors with a long-term earnings growth rate of 7.5% has pulled off an average positive earnings surprise of 23.7% in the trailing four quarters.

G-III Apparel with a long-term earnings growth rate of 15% has delivered an average positive earnings surprise of 6.1% in the last four quarters.

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