Investing.com — JP Morgan downgraded PVH Corp (NYSE: ) to “neutral” due to a slower-than-expected recovery in value growth amid global macroeconomic challenges and currency pressures.
“While we see a multi-year brand unlock underway with a new management team focused on increasing the desirability of its brands, we see an extended path to target margins given a slower core value recovery alongside continued macroeconomic challenges globally,” the analyst said.
The brokerage also cut its price target for the apparel maker to $113 from $149, reflecting a more cautious view of parent company Calvin Klein and Tommy Hilfiger.
JP Morgan noted the potential for long-term brand improvement under PVH’s new leadership, including efforts to improve product design and marketing, but analysts noted an extended path to management’s mid-teens operating margin target.
The report also highlighted risks associated with a competitive promotional environment, fluctuating foreign exchange rates and potential economic headwinds. JP Morgan noted that a weaker macroeconomic backdrop or changes in global trade policy could pose additional risks to PVH’s valuations.
