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On Monday, Barclays (LON:BARC) analyst Adrienne Yih adjusted the price target for Hanesbrands (NYSE:HBI), elevating it to $6.00 from the previous $5.00 while retaining an Equalweight rating on the stock. Currently trading at $5.34, InvestingPro data shows the stock has experienced a strong return over the last month despite a challenging six-month period. The adjustment followed a series of management meetings which provided key insights into the company’s standing and future prospects.
Yih’s commentary highlighted a generally optimistic tone from the meetings, with management expressing confidence in the company’s strategic direction and the potential for growth. According to InvestingPro analysis, which offers comprehensive insights through its Pro Research Reports covering 1,400+ US stocks, Hanesbrands maintains a FAIR overall financial health score. Despite widespread industry challenges, such as intermittent tariffs, Hanesbrands is perceived to have adeptly managed these issues. The analyst anticipates no significant supply chain disruptions from tariffs for the company as the year progresses.
The decision to augment the price target for Hanesbrands was based on a revised valuation multiple, moving from 9 times to 10 times, which aligns with the company’s current trading metrics. While the company wasn’t profitable in the last twelve months, InvestingPro data indicates analysts expect profitability to return this year. This increase reflects a belief in the company’s ability to maintain its operational performance and mitigate external pressures effectively.
Yih’s report also mentioned an increase in the price target for another company, Kontoor Brands (NYSE:KTB), which was attributed to expected benefits from synergies with Lee and Helly Hansen. This separate adjustment saw a price target increase from 13 times to 15 times, slightly above the current trading multiple of 14 times.
Hanesbrands has been navigating a complex environment, with tariffs posing a recurring challenge across the industry. However, the company’s strategies have seemingly allowed it to remain on course, with no anticipated disruptions to its supply chain toward the year’s end. The revised price target from Barclays signals a recognition of these efforts and the company’s capacity to sustain its market position.
In other recent news, Hanesbrands Inc. reported its first-quarter 2025 earnings, exceeding Wall Street expectations with earnings per share of $0.07, compared to the forecasted $0.03. The company’s revenue also surpassed predictions, reaching $760 million against an expected $757.47 million. The firm maintained its full-year outlook, expecting continued margin expansion. Citi analyst Kate McShane raised the price target for Hanesbrands from $4.50 to $5.50, maintaining a Neutral rating. McShane highlighted the company’s improved gross margin and reduced selling, general & administrative expenses as positive developments. The analyst noted that Hanesbrands’ fiscal year 2025 guidance might be seen as conservative, given the company’s advancements. Additionally, approximately 50% of Hanesbrands’ manufacturing is conducted in the western hemisphere, which could be beneficial as brands seek to move production closer to home. Despite these positive indicators, McShane pointed out that the risk/reward profile appears balanced.
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