PVH (PVH:NYS) Fundamental Valuation Report

Fundamental Valuation Report

PVH(PVH:NYS)

Consumer Cyclical:Apparel Manufacturing

This Report was generated using the valuation tools available on StockCalc.com. For a free 30 day trial click here.

Close Price/Date
$67.07 (USD) 09/11/2020

Weighted Valuation
$84.33 (USD)

Overall Rating
Undervalued by 25.7%

Valuation Models Comparables: $103.56 (USD)
Discounted Cash Flow: $92.32 (USD)
Valuation Methods This company is:
Cash Flow: Undervalued on a Cash Flow Valuation
Comparable Company: Undervalued on a Comparable Valuation
Asset: Undervalued on an Asset Valuation
According to Analyst consensus at $84.33 this stock is Undervalued

Company Overview (PVH:NYS USD)

Price 67.07
Range 66.08 – 67.75
52 week 29.05 – 106.91
Open 67.45
Vol / Avg. 1.18M/1.33M
Mkt cap 4.77B
P/E 9.41
Div/yield 0.11/0.00
EPS 5.60
Shares 71.09M
Beta 2.16

Company Description

PVH designs and markets branded apparel in more than 40 countries. Its key fashion categories include men’s dress shirts, ties, sportswear, underwear, and jeans. PVH’s leading designer brands, Calvin Klein and Tommy Hilfiger, generate about 85% of its revenue. PVH also owns several smaller brands, including Izod, Van Heusen, and Arrow, and licenses brands from third parties. PVH distributes its clothing wholesale to retailers and through company-owned stores. The company traces its history to 1881 and is based in New York City.

Valuation Details

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for PVH:NYS

Using a discounted cash flow model we generated an intrinsic value of $92.32 (USD) for PVH:NYS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

PVH:NYS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $92.32 1% 5% 1% 5%
WACC (or Ke) 9.60 $119.99 $71.98
Terminal Growth Rate 3.00 $73.94 $117.26
Tax Rate 0.07 $100.43 $84.20
Cash Flow 1,118,683,000 $82.85 $101.79
Capital Expenditures -302,740,000 $89.97 $94.66
Long Term Debt 3,377,600,000 $94.69 $89.94

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $125.33 (USD) for PVH:NYS. We also generated a valuation of $103.56 (USD) using other metrics and comparables.
The comparable companies were VF (VFC:NYS), Columbia Sportswear (COLM:NAS), Oxford Industries (OXM:NYS), Ralph Lauren (RL:NYS) and Under Armour (UAA:NYS).

Company PVH:NYS End Date Value
Earnings/Share ($14.18) (USD)
Book Value/Share $64.47 (USD)
Sales/Share $111.98 (USD)
Cash Flow/Share $13.12 (USD)
EBITDA/Share $12.25 (USD)
Price Based on Comps Adjustment Factor (%)
$0.00 (USD) 0.0
$265.95 (USD) -51.7
$185.20 (USD) -45.1
$185.92 (USD) -41.7
$0.00 (USD) 3.2
PVH:NYS Ratios Used Average Values VFC:NYS COLM:NAS OXM:NYS RL:NYS UAA:NYS
0.00 PE Ratio 59.05 100.04 33.83 0.00 43.27 0.00
1.04 PB Ratio 4.13 9.37 3.60 1.86 2.18 3.61
0.60 PS Ratio 1.65 2.92 2.21 0.90 1.10 1.14
5.11 PCF Ratio 27.09 29.67 24.68 10.12 11.81 59.15
0.00 EV to EBITDA 27.83 44.80 16.43 0.00 22.26 0.00

Multiples

Using a multiples approach we generated a valuation of  $115.41 (USD) for PVH:NYS

Company PVH:NYS End Date Value
Earnings/Share ($14.18) (USD)
Book Value/Share $64.47 (USD)
Sales/Share $111.98 (USD)
Cash Flow/Share $13.12 (USD)
EBITDA/Share $12.25 (USD)
Price Based on Comps Adjustment Factor
$0.00 (USD) 0
$102.50 (USD) 0
$105.78 (USD) 0
$120.49 (USD) 0
$132.86 (USD) 0
Ratios Ratio Average
PE Ratio 13.37
PB Ratio 1.59
PS Ratio 0.94
PCF Ratio 9.19
EV to EBITDA 10.84

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  PVH:NYS for the last 10 years was  1.71

We ran the Adjusted Book Value for  PVH:NYS and generated a book value of  $62.43 (USD)
By multiplying these we get an adjusted valuation of  $106.87 (USD)

Analyst Data

In the Stockcalc database there are 3 analysts that provide a valuation for PVH:NYS. The 3 analysts have a concensus valuation for PVH:NYS for 2021 of $84.33 (USD).

PVH:NYS PVH

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
4 2 0 4.3333 Outperform 2020-9-10

Current Price: 67.07 USD

Analyst Consensus
USD Millions 2021 2022 2023
Mean EPS -2.60 6.53 7.90
# EPS Analysts 4 4 2
Mean Revenue 7,065.20 8,709.50 8,675.90
# Revenue Analysts 3 3 2
Mean Target Price 84.33
Mean Cash Flow 7.89 10.10 13.02
Mean EBITDA -138.10 984.60 1,086.10
Mean Net Income -199.30 457.10 537.70
Mean Debt Outstanding 1,698.00 1,393.30 1,483.10
Mean Tax Rate
Mean Growth Rate 3.20
Mean Capital Expenditure 207.90 316.50 325.10

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.

The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).

The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.

With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.

If we have Analyst coverage for the company we use the consensus target price here.

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