Is PVH a Buy Despite Earnings Volatility and Tariff Pressures?

The stock of PVH Corp. (NYSE: PVH), owner of iconic brands like Calvin Klein and Tommy Hilfiger, has faced turbulence in 2025 due to macroeconomic headwinds and U.S. tariff pressures. However, a closer look at its recent financial performance, valuation metrics, and analyst sentiment reveals a compelling case for long-term investors. With UBS reiterating a Buy rating and a $148 price target implying an 81% upside from current levels, PVH's undervaluation and strategic resilience warrant serious consideration despite near-term challenges.

Q2 2025 Outperformance and Full-Year Guidance

PVH's Q2 2025 results demonstrated operational strength, with revenue rising 4% year-over-year to $2.167 billion, surpassing guidance for low single-digit growth. Non-GAAP earnings per share (EPS) of $2.52 far exceeded the projected range of $1.85 to $2.00, underscoring the company's ability to navigate cost pressures and deliver profitability. This performance reinforced PVH's full-year non-GAAP EPS guidance of $10.75 to $11.00, which accounts for an estimated $70 million EBIT reduction from tariffs in 2025. While the updated guidance reflects a downward revision from earlier estimates of $12.40 to $12.75, the company has taken mitigation steps to offset the $1.05-per-share negative impact from tariffs.

Valuation Metrics Suggest Significant Undervaluation

PVH's current price-to-earnings (P/E) ratio of 8.0x is sharply below its calculated fair ratio of 18.7x, indicating a substantial discount to intrinsic value. This gap widens when considering the company's strong balance sheet, brand equity, and long-term growth initiatives. UBS analysts highlight PVH's strategic investments in marketing and product innovation as key drivers of future earnings expansion, even as near-term tariffs weigh on margins. The stock's recent 17% drop following the guidance revision has created an entry point for investors who can look past short-term volatility.

Analyst Confidence and Strategic Resilience

UBS's reaffirmed Buy rating and $148 price target remain anchored to PVH's long-term earnings growth potential. The firm emphasizes the company's dominant positioning in the premium apparel sector, with Calvin Klein's global appeal and Tommy Hilfiger's revitalization efforts providing durable competitive advantages according to analysts. Additionally, PVH's reaffirmed Q3 and full-year guidance, coupled with expectations of $2.56 EPS and $2.28 billion in revenue for Q3, suggests management's confidence in executing its strategic priorities.

December Earnings Report: A Critical Test

With PVH's Q3 earnings slated for December 3, 2025, the market will scrutinize whether the company can maintain its outperformance amid ongoing tariff pressures. Analysts' expectations of $2.56 EPS and $2.28 billion in revenue represent a bar that PVH has historically cleared. A strong report could catalyze a re-rating of the stock, particularly if the company provides clarity on tariff mitigation progress or accelerates cost-saving initiatives.

Risks and Considerations

While PVH's valuation and strategic direction are compelling, investors must weigh risks such as persistent inflation, shifting consumer spending patterns, and the potential for further tariff escalations. The recent CFO transition, with Melissa Stone stepping in as interim leader, also introduces short-term governance uncertainty. However, these risks appear manageable given PVH's operational track record and UBS's bullish outlook.

Conclusion: A Buy for Long-Term Investors

PVH's combination of undervaluation, strong brand positioning, and analyst confidence makes it an attractive candidate for long-term investors. The stock's current P/E ratio of 8.0x offers a margin of safety, while UBS's $148 price target reflects optimism about future earnings power. Although near-term volatility and tariff pressures remain, PVH's Q2 outperformance and strategic resilience suggest the company is well-positioned to deliver value over time. For those willing to tolerate short-term noise, PVH presents a rare opportunity to invest in a high-quality consumer durables business at a significant discount to its intrinsic worth.