Earnings, Guidance Have Analysts Running to PVH Stock

PVH also lifted its full-year 2019 forecast despite noting some weakness in its Chinese market

Deputy Editor
Mar 28, 2019 at 10:06 AM
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The shares of apparel concern PVH Corp (NYSE:PVH) are soaring -- up 15.2% at $127.72 -- after the company posted fourth-quarter earnings and revenue that beat analysts expectations. PVH said social media influencers, like Kendall Jenner, have helped accelerate sales of its Tommy Hilfiger and Calvin Klein brands among millennials, with the former being its biggest driver. The company also lifted its 2019 full-year forecast. On a more bearish note, PVH executives mentioned pressures on the Chinese consumer market during the conference call.

As a result, analysts are already flocking to the stock. J.P. Morgan Securities just lifted its target price to $139 from $132 and Credit Suisse just raised its own target to $130 from $125. Most analysts were on board before earnings though. Nine analysts following the stock issued a "strong buy" rating, one gave it a "buy," and three doled out a tepid "hold." Now, the consensus 12-month target price of $135.18 represents a level not seen by PVH since October, but sits at a slim 3.6% premium to current levels. 

PVH stock has been coming off its two-year low of $86.46 in late December -- up 19.3% year-to-date at yesterday's close. The security is pacing for its fourth straight win and its best day since 2012. Plus, PVH is now trading atop its 200-day moving average for the first time since August.

Drilling down, it looks like short-term options player have been piling on puts of late. PVH's Schaeffer's put/call open interest ratio (SOIR) of 1.02 sits in the 80th percentile of its annual range, showing the rare setup of put open interest outweighing call open interest among contracts expiring within three months. Elsewhere, short interest appears to be on the rise, up 8.3% in the last reporting period, which could provide additional tailwinds for the stock, if these bearish bets begin to unwind following the positive earnings response.



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