Kontoor Brands (KTB – Research Report), the Consumer Cyclical sector company, was revisited by a Wall Street analyst yesterday. Analyst Brooke Roach from Goldman Sachs upgraded the rating on the stock to a Buy and gave it a $56.00 price target.
Brooke Roach’s Buy rating for Kontoor Brands emerged from a variety of factors. She first noted the robust brand momentum Kontoor Brands is experiencing, with market share gains indicating their strength. This momentum is expected to persist, supported by strategic investments in product diversification and direct-to-consumer distribution. Furthermore, Kontoor Brands’ value-based market positioning and appealing product offerings play a significant role in this momentum.
In addition, Roach cited the normalization of inventory destocking trends as a positive factor. Despite the majority of Kontoor Brands’ revenues being derived from the challenged wholesale channel, she believes the company’s relative exposure to mass retail could support a more normalized growth rate moving forward. Notably, the potential for significant margin expansion in the second half of 2023 and beyond has also been highlighted. This includes recouping raw material costs and cycling previous year manufacturing fixed costs. Finally, Kontoor Brands’ attractive dividend was also taken into account in Roach’s analysis.
KTB’s price has also changed slightly for the past six months – from $47.730 to $45.890, which is a -3.86% drop .
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Kontoor Brands (KTB) Company Description:
Kontoor Brands, Inc. engages in the manufacture and sale of apparel. It designs, manufactures, sources, markets, and distributes its portfolio of brands which include Wrangler and Lee denim, apparel, and accessories. The company was founded on November 11, 2018 and is headquartered in Greensboro, NC.
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