Hanesbrands (HBI – Research Report), the Consumer Cyclical sector company, was revisited by a Wall Street analyst yesterday. Analyst Ike Boruchow from Wells Fargo maintained a Sell rating on the stock and has a $3.50 price target.
Ike Boruchow has rated Hanesbrands with a Sell due to a combination of factors including the company’s continued underperformance and a pessimistic outlook for the near future. The company has missed revenue targets for the fourth quarter and issued a first-quarter guidance that falls significantly below market expectations. Despite gross margins and average unit costs showing improvement, the persistent decline in revenue, particularly the double-digit drop in the recent quarter, is alarming considering Hanesbrands’ existing debt levels.
Moreover, the report highlights particular concerns with the Champion brand, which has been a significant contributor to revenue shortfalls. The brand is expected to face its sixth consecutive quarter of steep revenue declines. While there is some optimism around the Innerwear segment due to market share gains, it still underperformed in growth expectations and is predicted to continue this trend. Overall, the combination of Hanesbrands’ weakening top-line, high leverage, and the need for a substantial second-half recovery to meet yearly projections leads to skepticism about the company’s ability to achieve a positive turnaround, prompting the Sell recommendation.
Boruchow covers the Consumer Cyclical sector, focusing on stocks such as Tapestry, PVH, and Lululemon Athletica. According to TipRanks, Boruchow has an average return of -2.9% and a 44.56% success rate on recommended stocks.
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Hanesbrands (HBI) Company Description:
Hanesbrands, Inc. is a consumer goods company, which engages in the design, manufacture, sourcing, and sale of everyday basic innerwear and activewear apparel in the Americas, Europe, Australia and Asia Pacific. It operates through the following three segments: Innerwear, Activewear, and International. The Innerwear segment includes core apparel products, such as men’s underwear, women’s panties, children’s underwear, socks and intimate apparel, sold in the United States (US). The Activewear segment consists of activewear products, such as T-shirts, fleece, performance apparel, sport shirts and thermals, sold in the US. The International segment composes of innerwear, activewear, hosiery and home goods products, sold outside of the US. Its brands include Hanes, Champion, Bonds, Maidenform, DIM, Bali, Playtex, Bras N Things, Nur Die/Nur Der, Alternative, L’eggs, JMS/Just My Size, Lovable, Wonderbra, Berlei, and Gear for Sports. The company was founded by J. Wesley Hanes in 1901 and is headquartered in Winston-Salem, NC.
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