UBS maintains Buy rating on Hanesbrands stock ahead of Q3 earnings

Investing.com - UBS has reiterated its Buy rating and $9.00 price target on Hanesbrands (NYSE:HBI), currently trading at $6.83 with a market capitalization of $2.41 billion, ahead of the company’s third-quarter 2025 earnings report scheduled for November 6.

The investment firm expects Hanesbrands to deliver earnings per share results in line with expectations for the third quarter. UBS anticipates limited changes to sell-side EPS estimates following the report. According to InvestingPro, six analysts have recently revised their earnings estimates upward, with the company trading at an attractive P/E ratio of 14.08.

UBS does not expect Hanesbrands to hold an earnings conference call or provide new fiscal year 2025 guidance due to its pending acquisition by Gildan. The acquisition is currently scheduled to close in late 2025 or early 2026.

The earnings report is expected to have minimal impact on Hanesbrands’ stock price or P/E ratio, with UBS predicting less volatility than the typical 8.7% movement the stock experiences around earnings announcements.

UBS believes Gildan’s upcoming third-quarter report could be a more significant catalyst for Hanesbrands’ stock, as Hanesbrands shareholders will receive 0.102 common shares of Gildan as part of the acquisition terms.

In other recent news, Hanesbrands has been a focal point of acquisition discussions, with Gildan Activewear reportedly in advanced talks to acquire the company. This potential transaction could value Hanesbrands at nearly $5 billion, with various reports suggesting differing per-share valuations. Amid these developments, Wells Fargo upgraded Hanesbrands’ stock rating from Underweight to Equal Weight, raising its price target to $6.00, following confirmation of a definitive acquisition agreement. Stifel, while maintaining a Hold rating, also set a $6.00 price target, reflecting the ongoing acquisition talks.

Additionally, Hanesbrands reported strong second-quarter earnings, with revenue surpassing Stifel’s estimates by $21.2 million and adjusted earnings per share exceeding expectations by $0.06. This earnings performance was bolstered by top-line strength and aligned EBIT margins. Wells Fargo had earlier raised its price target to $5.00 following initial takeover reports. However, the acquisition negotiations remain ongoing, with the potential for the deal to be finalized soon, though nothing is yet confirmed.

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