Chris Li CFA, an analyst from Desjardins, maintained the Buy rating on Gildan Activewear (GIL – Research Report). The associated price target is C$53.00.
Chris Li, CFA has given his Buy rating due to a combination of factors including Gildan Activewear’s (GIL) market position and industry trends. Despite the trimming of 2024 sales and earnings per share (EPS) forecasts reflecting current macroeconomic headwinds, Li maintains a positive long-term outlook for the company. He observed from the Impressions Expo that industry inventories are normalizing and sales growth is mainly driven by point of sale, with GIL’s products in fashion basics and fleece outpacing the market and gaining share. Li acknowledges potential near-term volatility and downside risks but believes that any substantial negative market reaction could present a favorable buying opportunity for long-term investors.
Furthermore, Li’s valuation considers the possibility of a challenging economic environment and leadership uncertainty, with a downside scenario predicting flat earnings in 2024 compared to 2023. However, he notes that GIL is trading below its historical average forward price-to-earnings (P/E) ratio, suggesting undervaluation. The company’s low-cost manufacturing capabilities, opportunities for market share gains, and long-term growth drivers, such as fashion basics and private labels, alongside a strong balance sheet, underpin his positive stance. Li’s analysis implies that GIL’s stock has potential for appreciation once market conditions improve and investor confidence is restored in the company’s management and growth outlook for 2024.
In another report released on January 21, BMO Capital also assigned a Buy rating to the stock with a $43.00 price target.
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Based on the recent corporate insider activity of 66 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of GIL in relation to earlier this year.
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Gildan Activewear (GIL) Company Description:
Gildan Activewear, Inc. engages in the manufacture and sale of printwear and branded apparel. Its products include activewear, underwear, socks, hosiery, and legwear. The firm operates under the brand name Gildan, American Apparel, Comfort Colors, Gold Toe, Anvil, Secret, Silks, Kushyfoot, Peds, and Mossy Oak. The company was founded by Glenn J. Chamandy and H. Gregory Chamandy on May 8, 1984 and is headquartered in Montréal, Canada.
Read More on GIL:
- Gildan Comments on Violations of US Antitrust Law by Browning West
- Gildan Activewear price target lowered to C$50 from C$51 at National Bank
- Gildan Activewear provides update on former CEO
- Vince Tyra To Assume Role of President and CEO of Gildan Activewear on January 15, 2024
- Gildan Activewear announces Tyra will assume role of President, CEO
