Gildan Activewear stock price target raised to $68 from $61 at RBC Capital

Investing.com - RBC Capital raised its price target on Gildan Activewear (NYSE:GIL) to $68.00 from $61.00 on Thursday, while maintaining an Outperform rating on the stock. The company’s shares, currently trading at $56.70, have already delivered an impressive 17.83% return year-to-date. InvestingPro data reveals the stock is trading near its 52-week high, with 11 additional exclusive insights available to subscribers.

The price target increase follows RBC’s assessment of Gildan’s acquisition of HanesBrands, which the firm views as a "complementary and logical fit" for the company.

RBC’s investment thesis for Gildan centers around the company’s position to capture market share over the medium term, supported by its vertically integrated low-cost manufacturing model alongside multiple structural drivers.

According to RBC Capital, the acquisition of Hanes strengthens Gildan’s ability to execute its strategic playbook, which contributed to the firm’s decision to raise its price target.

The price target adjustment came after RBC revised its estimates for Gildan Activewear following the acquisition announcement.

In other recent news, Gildan Activewear has announced a significant merger, entering into a definitive agreement to acquire HanesBrands in a deal valued at approximately $4.4 billion. This acquisition is set to position Gildan as a leading global basics apparel company. Additionally, Gildan reported strong financial performance in the second quarter, with earnings per share of $0.97, surpassing the previous year’s $0.74 and exceeding consensus estimates by $0.01. The company’s revenue also rose to $919 million, beating expectations by $13 million and improving from $862 million in the same period last year.

Following these developments, several investment firms have adjusted their outlook on Gildan. BMO Capital raised its price target for Gildan to $70, citing the positive impact of the HanesBrands acquisition. CFRA also increased its price target to C$76, maintaining a Hold rating due to the strong quarterly performance. Barclays raised its price target to $56, noting the company’s second-quarter results slightly exceeded market expectations. Furthermore, RBC Capital initiated coverage on Gildan with an Outperform rating, highlighting the company’s robust execution across its business operations.

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