NEW YORK ( TheStreet Ratings) -- Every trading day TheStreet Ratings' stock model reviews the investment ratings on around 4,900 U.S. traded stocks for potential upgrades or downgrades based on the latest available financial results and trading activity.
TheStreet Ratings released rating changes on 84 U.S. common stocks for week ending June 3, 2011. 44 stocks were upgraded and 40 stocks were downgraded by our stock model.
Rating Change #10
Phillips-Van Heusen Corporation (PVH - Get Report) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income, increase in stock price during the past year, growth in earnings per share and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.Highlights from the ratings report include:
- 49.30% is the gross profit margin for PHILLIPS-VAN HEUSEN CORP which we consider to be strong. Regardless of PVH's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 4.20% trails the industry average.
- PHILLIPS-VAN HEUSEN CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PHILLIPS-VAN HEUSEN CORP reported lower earnings of $0.53 versus $3.08 in the prior year. This year, the market expects an improvement in earnings ($4.90 versus $0.53).
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Textiles, Apparel & Luxury Goods industry. The net income increased by 308.8% when compared to the same quarter one year prior, rising from -$27.61 million to $57.67 million.
- PVH's very impressive revenue growth greatly exceeded the industry average of 4.7%. Since the same quarter one year prior, revenues leaped by 121.2%. Growth in the company's revenue appears to have helped boost the earnings per share.