UBS cuts G-III Apparel price target to $26, maintains neutral

On Monday, UBS analyst Mauricio Serna adjusted the price target for G-III Apparel (NASDAQ:GIII) to $26 from the previous $29, while continuing to hold a Neutral stance on the company’s stock. Currently trading at $22.51, the company maintains a "GREAT" financial health score according to InvestingPro analysis. Serna’s reassessment follows the release of G-III Apparel’s first-quarter financial report, which prompted a revision of the earnings per share estimates for fiscal years 2026 to 2028 due to greater than expected gross margin percentage headwinds.

The analyst acknowledged G-III Apparel’s strong brand portfolio and the potential for market share expansion in the U.S. wholesale and international sectors. With a healthy gross profit margin of 40.77% and strong cash flows that adequately cover interest payments, the company maintains solid operational metrics. Nevertheless, the report highlighted concerns about future growth limitations, particularly the anticipated phase-out of $1.1 billion in revenues from licenses of PVH (NYSE:PVH) brands. This expected development led to the projection of negative compound annual growth rates (CAGRs) of 2% for sales and 4% for earnings per share over a five-year period.

The revised $26 price target suggests a 16% potential upside for G-III Apparel shares. However, the analyst indicated that there are more attractive investment opportunities elsewhere in the market. This valuation is based on the belief that the company’s outlook warrants a lower price-to-earnings (P/E) ratio.

Despite the decrease in the price target, UBS’s neutral rating remains unchanged. This position reflects a cautious optimism about G-III Apparel’s ability to leverage its brand portfolio while also recognizing the challenges it faces in terms of long-term growth potential and the impact of external factors such as tariffs.

In other recent news, G-III Apparel Group Ltd reported a strong earnings performance for Q1 FY2026, with earnings per share (EPS) of $0.19, significantly exceeding the forecast of $0.1079. Despite surpassing expectations, the company experienced a decline in net sales to $584 million, compared to $610 million in the previous year, and subsequently withdrew its full-year earnings forecast due to uncertainties, including potential tariff impacts. KeyBanc Capital Markets adjusted its price target for G-III Apparel to $30, down from $40, while maintaining an Overweight rating, citing the company’s strong brand growth but noting challenges such as license roll-offs and tariff impacts. Telsey Advisory Group also raised its price target to $30 from $27, maintaining a Market Perform rating, and highlighted the robust performance of G-III’s owned brands like DKNY and Karl Lagerfeld. Both firms acknowledged the company’s strategic focus on expanding higher-margin owned brands and direct-to-consumer sales, despite macroeconomic uncertainties. G-III Apparel reaffirmed its FY2026 net sales guidance of $3.14 billion but withdrew net income and adjusted EBITDA guidance, reflecting ongoing challenges. The company continues to focus on mitigating tariff impacts through strategic sourcing and vendor negotiations.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.