Jefferies Upgrades PVH Stock to Buy With $105 Price Target

Shifting sentiment from a major financial institution is providing a boost to shares of PVH, the global apparel and footwear company known for its iconic brands like Tommy Hilfiger and Calvin Klein. A recent research note highlights the firm’s strategic evolution and operational enhancements as key drivers for potential future stock appreciation.

Analyst Upgrades PVH Stock

Investment bank Jefferies has significantly improved its outlook on PVH, upgrading the stock’s rating from “Hold” to “Buy.” Simultaneously, the firm substantially increased its price target for PVH shares from $70 to $105. This new target suggests a potential upside of approximately 30.4% from the stock’s recent trading levels.

According to analyst Ashley Helgans, PVH is successfully transforming into a more focused, efficient, and strategically aligned organization. She attributes this positive trajectory to the effectiveness of the new management team and the clarity of the company’s operational strategy, which are expected to underpin stronger performance in the medium term.

Improved Financial Outlook

Jefferies anticipates a turnaround in PVH’s financial performance. After experiencing mid-single-digit sales declines last year, the firm projects that revenue will stabilize and begin to see moderate increases going forward. This expected improvement is linked to the company overcoming previous challenges and the implementation of new management initiatives.

Profitability is also forecast to rebound. Jefferies predicts high single-digit growth in earnings per share (EPS) for the current year, followed by low double-digit growth in 2026. This earnings expansion is expected to be fueled by operational cost savings and ongoing share repurchase programs.

Navigating Risks and Identifying Catalysts

A notable risk identified by Jefferies is PVH’s exposure to the Chinese market, which contributes around 20% of the company’s earnings before interest and taxes (EBIT). The analyst cautions that inclusion on non-reliable entity lists could potentially restrict operations. However, the note also suggests that strategic solutions such as licensing agreements or outsourcing could mitigate this impact and potentially act as positive catalysts for the stock.

Furthermore, Jefferies points out that only about 30% of PVH’s sales originate from the United States, and the company has minimal reliance on imported goods from China, which helps limit the impact of potential tariffs. Despite the improving outlook and strategic progress, PVH’s stock trades at a relatively low price-to-earnings (P/E) multiple of just 7.5 times, which is roughly 40% below the average valuation of its industry peers, suggesting potential undervaluation.