Price Forecast:

Bullish Case: Bullish sentiment could arise if PVH's upcoming earnings report on November 29 demonstrates better than expected performance, capitalizing on recent modest consumer spending recovery and the brand’s sustainability initiatives.

Bearish Case: A bearish outlook is suggested by structural challenges and potential market penalties related to China's investigation. This uncertainty may lead to a further decline in PVH's stock value if allegations impact sales.

Potential Outcomes:

1. Strong earnings push stock above $110 (30%).

2. Investigation repercussions lead to steep declines below $95 (40%).

3. Continued market uncertainty keeps stock fluctuating in the $100-$105 range (30%).

Trading Oracle: Consider a bearish approach by executing a credit spread: sell 1 $105 Call and buy 1 $110 Call, targeting the earnings impact. Alternatively, explore a bullish debit strategy, buying a $100 Call while selling a $105 Call to hedge against volatility risks and capture moderate upside if earnings beat expectations. Favoring short-term strategies aligns with current volatility skews.

November 17, 2024