PVH (PVH) Shares Appear Cheap at about 6x Trailing Earnings

Investment management company First Pacific Advisors recently released its “FPA Queens Road Small Cap Value Fund” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. The Fund returned -0.36% in Q4 2025, compared to the Russell 2000 Value Index’s 3.26%. In 2025, the Fund has returned 13.36% compared to 12.59% gain for the Index. The Fund outperformed in the first half of 2025, when markets were weak and volatile. However, in the second half of 2025, markets favored speculative and low-quality stocks, leading to the Fund’s underperformance. The portfolio is designed to protect clients from market drawdowns by focusing on quality and value. Please review the Fund’s top five holdings to gain insights into their key selections for 2025.

In its fourth-quarter 2025 investor letter, FPA Queens Road Small Cap Value Fund highlighted stocks such as PVH Corp. (NYSE:PVH). Based in New York, New York, PVH Corp. (NYSE:PVH) is an apparel company that operates through Tommy Hilfiger and Calvin Klein brands. The one-month return of PVH Corp. (NYSE:PVH) was 5.45%, and its shares lost 12.30% of their value over the last 52 weeks. On February 12, 2026, PVH Corp. (NYSE:PVH) stock closed at $68.15 per share, with a market capitalization of $3.279 billion.

FPA Queens Road Small Cap Value Fund stated the following regarding PVH Corp. (NYSE:PVH) in its fourth quarter 2025 investor letter:

"PVH Corp. (NYSE:PVH) is an apparel company that owns the Tommy Hilfiger and Calvin Klein brands globally. Most of PVH’s earnings come from Europe, where the Tommy and Calvin brands are considered “almost luxury” and where PVH has demonstrated high single digit organic growth w ith pricing power over the decade preceding Covid. CEO Stefan Larsson has done an excellent job revitalizing the company and improving margins at PVH’s moribund U.S. operations. But, comparable revenue has been roughly flat over the last four quarters as the company bumped into weaker global consumer spending and actively cleaned up its channel inventory in Europe. Investors are skittish about tariffs and, in 2025, PVH’s inclusion on China’s “Unreliable Entity” list which threatens the roughly 15% of the company’s profitability that comes from China. But PVH’s sales and sourcing are globally diversified, and the company uses its prodigious cash flow to buy back shares. We think shares are cheap at roughly 6x trailing earnings."

PVH Corp. (NYSE:PVH) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 31 hedge fund portfolios held PVH Corp. (NYSE:PVH) at the end of the third quarter, compared to 33 in the previous quarter. While we acknowledge the potential of PVH Corp. (NYSE:PVH) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered PVH CORP. (NYSE:PVH) and shared Longleaf Partners Fund' views on the company. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.