Bank CEOs meet with Trump to discuss Fannie Mae and Freddie Mac - Bloomberg
On Monday, Citi analyst Kate McShane adjusted the price target for Hanesbrands (NYSE:HBI), lifting it from $4.50 to $5.50, while maintaining a Neutral rating on the stock. The revision followed the company’s first-quarter performance, which surpassed both consensus and guidance in terms of sales, gross margin (GM), and selling, general & administrative expenses (SG&A).
McShane noted that management reaffirmed its financial guidance for fiscal year 2025, interpreting the absence of raised expectations as a sign of caution on the company’s part. Despite recent stock volatility, with shares down over 36% in the past six months, InvestingPro data shows analysts expect the company to return to profitability this year. The analyst mentioned that approximately 50% of Hanesbrands’ manufacturing is conducted in the western hemisphere, which positions the company advantageously as retailers and brands seek to move production closer to home, a process known as near-shoring.
The company’s current tariff navigation and the strides made in improving gross margin and reducing SG&A expenses were highlighted as positive developments. McShane suggested that the fiscal year 2025 guidance might be seen as conservative given these advancements.
Despite these positive indicators, McShane pointed out that with the stock trading at approximately 7 times its fiscal year 2025 enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA), the risk/reward profile appears balanced. The current EV/EBITDA multiple stands at 8.6x, while InvestingPro analysis suggests the stock is fairly valued. However, the tone remained somewhat optimistic following the company’s quarterly report.
In other recent news, Hanesbrands Inc. reported its first-quarter 2025 earnings, which exceeded Wall Street expectations. The company achieved an earnings per share (EPS) of $0.07, surpassing the forecasted $0.03, and reported revenue of $760 million, slightly above the anticipated $757.47 million. This marks a year-over-year EPS increase of 240% and a revenue growth of 2%. Despite challenges in the U.S. market, particularly in the intimate apparel category, Hanesbrands maintained its full-year outlook, projecting continued margin expansion. For the second quarter of 2025, the company expects sales of $970 million and an EPS of $0.18. Additionally, Hanesbrands’ operating margin expanded by 390 basis points to 10.7%, and the company achieved a gross margin of 41.6%, up 165 basis points. The company has expressed confidence in mitigating potential tariff impacts expected in the fourth quarter.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.