THE SPARK: Erinn Murphy of Piper Jaffray & Co. lowered PVH to "Neutral" from "Overweight," saying shares could "pause" over the next 12 months as investors weigh the burden of integrating Warnaco. The stock has gained about 35 percent over the past 52 week and last week hit a record high of $125.50.
But Murphy remains optimistic about profit growth at PVH. She raised her earnings forecast for this year, and her profit predictions for the next two years both top the average estimates of analysts polled by FactSet.
THE BACKGROUND: PVH, previously known as Phillips-Van Heusen, sells brands like Calvin Klein, Tommy Hilfiger, Izod and Timberland. Buying Warnaco helped cementits control of the Calvin Klein clothing brand.
THE ANALYSIS: Murphy said that aside from the cost of efforts to integrate Warnaco, PVH may also be facing weak demand for denim clothing in Asia. That could hurt Calvin Klein Jeans, she said in a client note Tuesday.
SHARE ACTION: PVH Corp.'s stock declined $2.78, or 2.3 percent, to $118.14 in afternoon trading.