UBS maintains G-III Apparel stock rating ahead of Q2 earnings

Investing.com - UBS has reiterated its Neutral rating and $26.00 price target on G-III Apparel (NASDAQ:GIII) ahead of the company’s upcoming second-quarter earnings report. The stock, currently trading at $26.70, appears undervalued according to InvestingPro analysis, with analyst targets ranging from $18 to $30.

UBS expects G-III Apparel to post a modest earnings beat of 2 cents per share for the second quarter, describing the period as "decent" for the apparel manufacturer. The company maintains strong financial health with an overall score of "GREAT" on InvestingPro, trading at an attractive P/E ratio of 6.0x.

The financial services firm anticipates G-III will maintain its fiscal year 2026 sales outlook but may not reinstate its full-year earnings guidance due to "tariff-related uncertainty."

UBS projects the company will provide third-quarter earnings guidance that aligns with the current consensus estimate of $1.87 per share.

The options market is pricing in a share price movement of approximately 7.0% following the earnings announcement, which is less than the historical average move of 12.3% for G-III Apparel’s quarterly reports.

In other recent news, G-III Apparel Group Ltd reported its first-quarter financial results for fiscal year 2026, showcasing earnings per share (EPS) of $0.19, which exceeded the forecasted $0.1079. However, the company experienced a decline in net sales to $584 million, down from $610 million the previous year, raising concerns among investors about future revenue prospects. Following these results, UBS analyst Mauricio Serna adjusted the price target for G-III Apparel to $26 from $29, maintaining a Neutral rating due to anticipated challenges in gross margin percentages and projected declines in sales and earnings over the next five years.

KeyBanc Capital Markets also revised its outlook, reducing the price target from $40 to $30 but retaining an Overweight rating, citing strong performance from G-III’s core owned brands like Karl Lagerfeld and DKNY. Despite retracting its profitability forecast for fiscal year 2025, KeyBanc remains optimistic about the company’s revenue guidance, supported by upcoming licensing launches. Telsey Advisory Group raised the stock target to $30 from $27, maintaining a Market Perform rating, as G-III’s owned brands compensated for lower revenues from Calvin Klein and Tommy Hilfiger licenses.

The firm’s first-quarter results were bolstered by effective expense management and other income, leading to an EPS figure that surpassed expectations. However, the outlook for the second quarter indicates potential challenges due to supply chain issues and shipment timing, prompting G-III to withdraw its full-year earnings forecast while keeping its revenue projections intact. These developments highlight the mixed sentiment among analysts and investors regarding G-III Apparel’s future performance.

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