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Investing.com - Wells Fargo has upgraded Hanesbrands (NYSE:HBI) from Underweight to Equal Weight and raised its price target to $6.00 from $5.00 following acquisition news. The stock, currently trading at $6.41, has surged nearly 38% in the past week, with InvestingPro data showing six analysts revising their earnings estimates upward.
The rating change comes after Hanesbrands confirmed it has entered into a definitive agreement to be acquired. The company, which maintains a healthy current ratio of 1.52 and market capitalization of $2.27 billion, announced the deal Thursday morning, following preliminary news released the previous day.
The acquisition values Hanesbrands at $4.4 billion enterprise value, according to Wells Fargo. The transaction is expected to close either later this year or in early 2026.
Wells Fargo analyst Ike Boruchow cited the acquisition agreement as the direct reason for the upgrade, noting the deal has now progressed to a definitive agreement stage.
The acquisition is being conducted by GIL, though further details about the terms of the agreement were not specified in the analyst’s comments.
In other recent news, Hanesbrands reported second-quarter earnings that surpassed expectations, with revenue exceeding estimates by $21.2 million and adjusted earnings per share coming in $0.06 higher than anticipated. This earnings outperformance was attributed to strong top-line growth. UBS has raised its price target for Hanesbrands to $9.00 from $8.00, maintaining a Buy rating, citing confidence in the company’s turnaround efforts and potential growth in its core innerwear business. Stifel also increased its price target to $6.00 from $5.00, maintaining a Hold rating after the earnings report.
Additionally, Gildan Activewear is reportedly in advanced talks to acquire Hanesbrands, with the Financial Times suggesting a potential deal valuing the company at nearly $5 billion, including debt. Wells Fargo raised its price target for Hanesbrands to $5.00 from $4.00, maintaining an Underweight rating amid these acquisition discussions. The potential acquisition terms include a cash and stock offer, with the deal possibly being finalized soon, although negotiations are ongoing and could still change. Stifel, while maintaining a Hold rating, has noted the acquisition talks, with media reports suggesting varying deal valuations.
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