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Investing.com - CFRA raised its price target on Gildan Activewear (NYSE:GIL) to C$76.00 from C$65.00 while maintaining a Hold rating, citing the company’s strong second-quarter performance. The $7.68 billion market cap company has delivered a solid 26% return over the past year, with shares currently trading near their InvestingPro Fair Value.
Gildan reported normalized second-quarter earnings per share of $0.97, compared to $0.74 in the same period last year, exceeding consensus estimates by $0.01. Revenue reached $919 million, surpassing estimates by $13 million and improving from $862 million in the prior-year quarter. The company maintains strong financial health with a "GOOD" rating from InvestingPro, supported by a comfortable current ratio of 3.87x.
The company’s Activewear segment sales increased 12% year-over-year to $822 million, driven by higher volumes, improved product mix, and higher net prices. In contrast, the Hosiery and Underwear segment saw a 23% decline to $96 million.
Gross margin expanded 110 basis points year-over-year to 30.4%, which CFRA attributed to lower raw material and manufacturing costs, as well as favorable pricing.
CFRA maintained its earnings per share estimates of $3.50 for 2025 and $3.80 for 2026, with the new price target based on 14.5 times the firm’s 2026 EPS estimate, in line with Gildan’s three-year average forward price-to-earnings multiple.
In other recent news, Gildan Activewear’s second-quarter 2025 results slightly surpassed market expectations, prompting Barclays (LON:BARC) to raise its price target for the company from $51.00 to $56.00 while maintaining an Overweight rating. This adjustment reflects confidence in Gildan’s financial performance. Additionally, Scotiabank (TSX:BNS) has reinstated coverage on Gildan Activewear with a Sector Outperform rating and a price target of $55.00. Analyst John Zamparo highlighted Gildan’s robust business model, which benefits from high margins and strong free cash flow conversion. Despite industry challenges, Gildan’s low-cost structure and strategic supply chain, which includes U.S.-sourced cotton, are expected to help it capture market share. These developments come amid a backdrop of weakened competition and a year projected to have minimal industry-wide sales growth.
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