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Investing.com - Stifel has maintained its Hold rating and $6.00 price target on Hanesbrands (NYSE:HBI) as reports emerge of potential acquisition by Gildan Activewear. The stock has surged 48.2% in the past week, with InvestingPro data showing the stock currently trading at $6.18, though technical indicators suggest overbought conditions.
According to Stifel, multiple media outlets have reported that Gildan Activewear is in advanced discussions to acquire Hanesbrands , with acquisition terms potentially being finalized as early as the end of this week through a cash and stock offer.
The deal would reportedly value Hanesbrands’ enterprise value at approximately $4.5 billion to $5 billion, which Stifel estimates would translate to a share price of $5.84 to $7.24 per share, compared to the intraday price of $6.14 per share.
The potential merger could allow both companies to capitalize on their complementary strengths in innerwear and activewear, with Bloomberg reporting that approximately $200 million in cost synergies might be realized from the transaction.
Stifel maintains its Hold rating based on Hanesbrands’ business fundamentals, while acknowledging that final deal terms or competing bids could drive the share price higher in a takeover scenario.
In other recent news, Hanesbrands reported second-quarter earnings that exceeded analysts’ expectations, with an earnings per share (EPS) of $0.24 compared to the projected $0.18, marking a 33.33% surprise. The company’s revenue also outperformed forecasts, reaching $991 million against the expected $969 million. Meanwhile, Gildan Activewear is reportedly in advanced talks to acquire Hanesbrands, with the potential deal valuing the company at nearly $5 billion, including debt. This potential acquisition has led to differing valuations, with the Financial Times suggesting a value of about $8.00 per share, while Bloomberg reported a possible deal at $6.00 per share.
Amid these developments, Wells Fargo raised its price target for Hanesbrands to $5.00 from $4.00, maintaining an Underweight rating. Stifel also increased its price target to $6.00 from $5.00, following the strong earnings report, while keeping a Hold rating. UBS expressed confidence in Hanesbrands’ ongoing turnaround efforts by raising its price target to $9.00 from $8.00 and maintaining a Buy rating. These recent developments highlight significant interest and activity surrounding Hanesbrands, with analysts adjusting their outlooks based on the company’s performance and potential acquisition.
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