PVH CORP (NYSE:PVH) – A Potentially Undervalued Apparel Stock Worth Considering

PVH CORP (NYSE:PVH) was identified by our stock screener as a decent value candidate. The company, known for brands like Tommy Hilfiger and Calvin Klein, shows a combination of reasonable fundamentals and an attractive valuation. Below, we examine why PVH might appeal to value investors.

Valuation

PVH stands out with a Valuation Rating of 8/10, indicating it trades at a discount compared to peers. Key points:

• P/E ratio of 6.97 – significantly lower than the industry average (76.59) and the S&P 500 (25.91).
• Forward P/E of 6.73 – suggesting continued undervaluation.
• Enterprise Value/EBITDA and Price/Free Cash Flow ratios are also favorable, placing PVH cheaper than most competitors.

Profitability

The company earns a Profitability Rating of 6/10, supported by:

• A healthy Gross Margin of 59.43%, outperforming 77% of industry peers.
• Positive operating cash flow and consistent profitability in recent years.
• Return on Equity (11.64%) and Return on Assets (5.42%) above industry medians.

Financial Health

PVH’s Health Rating of 5/10 reflects a stable but mixed financial position:

• Low Debt/Equity ratio (0.31), indicating manageable leverage.
• Debt-to-FCF ratio of 3.59 suggests the company can pay off debt in under four years.
• Liquidity metrics like Current Ratio (1.27) and Quick Ratio (0.72) are weaker than peers, a potential area to monitor.

Growth

With a Growth Rating of 4/10, PVH shows modest but improving prospects:

• EPS expected to grow 13.81% annually over the next few years.
• Revenue growth remains slow but is projected to accelerate slightly.
• Recent share buybacks signal confidence in long-term value.

Our Decent Value Stocks screener lists more stocks with similar characteristics.
For a deeper dive, review the full PVH fundamental report.

Disclaimer

This is not investing advice! The article highlights observations at the time of writing, but you should conduct your own analysis before making investment decisions.