Is PVH Stock Too Cheap to Ignore After Q1 Earnings?

Core Viewpoint - PVH's stock has dropped nearly 20% after lowering its full-year guidance despite exceeding Q1 expectations, raising questions about potential investment opportunities in the premium retailer's stock [1][3]. Group 1: Company Overview - PVH, formerly known as Phillips-Van Heusen Corporation, operates iconic fashion brands like Tommy Hilfiger and Calvin Klein, specializing in a wide range of apparel and accessories sold globally [2]. - The company has consistently surpassed earnings expectations, achieving a Q1 EPS of $2.30, exceeding the expected$2.24, although this represents a 6% decline from the previous year's $2.45 [5][6]. Group 2: Financial Performance - PVH reported Q1 sales of$1.98 billion, surpassing estimates of $1.93 billion and showing an increase from$1.95 billion in the prior period [6]. - The company has maintained an average earnings surprise of 13.47% and a sales surprise of 1.38% over the last four quarters [6]. Group 3: Guidance and Projections - PVH has lowered its EPS guidance for fiscal 2026 to between $10.75 and$11.00, down from a previous range of $12.40 to$12.75, and below the current Zacks Consensus of $12.59 [8][9]. - Despite the lowered guidance, Zacks projects a 13$14.21, although EPS estimates may trend lower following the recent guidance [9]. Group 4: Valuation Metrics - PVH's stock is currently valued at 6.4X forward earnings, significantly lower than the Zacks Textile-Apparel Industry average of 13.3X, indicating a potential buying opportunity for long-term investors [11]. - The company's PEG ratio stands at 0.57, suggesting it is undervalued relative to its growth rate, and it trades at less than 1X forward sales [12]. Group 5: Investment Considerations - Following the Q1 report, PVH stock holds a Zacks Rank 3 (Hold), with potential for a rebound, but investors should monitor earnings estimate revisions closely [16]. - A decline in FY26 EPS estimates is anticipated, and a significant drop in FY27 estimates could indicate further downside risk [16][17].