Buy Rating Reaffirmed for Gildan Activewear Amidst Strategic Growth and Valuation Appeal

Analyst Chris Li CFA from Desjardins maintained a Buy rating on Gildan Activewear (GIL – Research Report) and keeping the price target at C$55.00.

Chris Li CFA has given his Buy rating due to a combination of factors that suggest Gildan Activewear has a solid outlook and strategic initiatives that align with long-term value creation. The new CEO, Vince Tyra, presented strategic priorities that appear reasonable and consistent with the activist investor Browning West’s proposals. The company’s conservative financial targets, which include mid-single-digit CAGR for net sales and an adjusted EBIT margin of 18–21%, reflect a cautious yet optimistic outlook on future growth and profitability. Additionally, GIL has reconfirmed its 2024 outlook and pre-announced first-quarter sales that align with consensus estimates, indicating a stable operational performance.
Furthermore, Gildan Activewear’s stock is currently trading at a forward P/E ratio that is below its historical average, which could indicate that the stock is undervalued. Key events that could serve as catalysts for the share price include the resolution of CEO/board uncertainty and evidence of improving growth throughout the year. Despite a weaker start in the first quarter, the long-term financial targets and strategic initiatives focused on organic growth, dividend growth, share repurchases, and potential value-accretive M&A activities provide a favorable margin and sales growth outlook. Therefore, Chris Li CFA maintains a positive long-term view on GIL’s stock.

According to TipRanks, Li CFA is a 4-star analyst with an average return of 4.6% and a 58.11% success rate. Li CFA covers the Consumer Cyclical sector, focusing on stocks such as Gildan Activewear, Dollarama, and Canadian Tire.

In another report released on April 8, RBC Capital also initiated coverage with a Buy rating on the stock with a $41.00 price target.

TipRanks tracks over 100,000 company insiders, identifying the select few who excel in timing their transactions. By upgrading to TipRanks Premium, you will gain access to this exclusive data and discover crucial insights to guide your investment decisions. Begin your TipRanks Premium journey today.

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.