PVH Corp. is a bit of a mystery. Its stock is going gangbusters, up nearly 90% from an end of September low. And the fashion clothing company's stock is above its 50-day line and well above its 200-day, a bullish sign. On top of that, on Thursday the Relative Strength (RS) Rating for PVH stock rose to a lofty 91, out of 99, up from 88. So why does it have such a weak earnings rating?
One reason for the disparity is that the parent of Calvin Klein, Tommy Hilfiger, Olga and other name brands has a quixotic earnings record this past year. For the quarter ended Jan. 31, 2022, PVH reported a massive 847% jump to $2.84 a share, reversing from a 38-cents per share drop the same quarter a year earlier.
It's been downhill from there. The next quarter it posted a 14% year-over-year drop in EPS, followed by a 24% dip and then a 3% decrease last quarter. That's earned it a weak 27 Earnings Per Share Rating. Its stock has risen sharply though, from a 43.49 intraday bottom on Sept. 30 to an 82.14 close Thursday. Perhaps the Street sees the minuscule 3% EPS decline as the bottom.
PVH Stock's Other Key Rating Shines
The 91 raised RS Rating means that PVH stock has outperformed 91% of all stocks, regardless of industry, over the past year. It's a notable accomplishment. Research shows that stocks that go on to make the biggest gains often have an RS Rating north of 80 as they begin their largest runs. It has an even higher 92 Composite Rating. And its A- Accumulation/Distribution Rating shows that big money investors are heavy buyers of its stock.
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Although the company reported on Nov. 30 that both earnings and sales growth declined slightly last quarter, its results were improved from the prior quarter. In its most recent report PHV said EPS slid 3% to $2.60 on a 2% dip in revenue to $2.28 billion. However, on its earning call on Dec. 1 the company raised its outlook for full-year EPS to $8.25 per share.
Look For Fresh Pattern To Emerge
On Thursday, PVH stock was down 1.6% though still above both the 50-day and 200-day lines. While now is not an ideal time to buy shares, see if the stock is able to form a base and break out.
PVH stock holds the No. 7 rank among its peers in the Apparel-Clothing Manufacturing industry group. Oxford Industries, Tapestry and Kontoor Brands are among the top 5 highly rated stocks within the group.
