Hanesbrands Stock Rises On UBS Upgrade: Retail’s Neutral

The brokerage expects a compound annual growth rate (CAGR) of about 24% in EPS after the current fiscal 2024.

Shares of Hanesbrands ($HBI) were up 5.6% as of 1:08 p.m. ET following a rating upgrade by UBS, but retail sentiment stayed neutral.

UBS upgraded the stock to ‘Buy’ from ‘Neutral’ raising the price target to $11 from $9. It based the upgrade on expectations of a positive shift in the company’s fundamentals, which in turn could lead to a growth in earnings per share (EPS), TheFly.com reported, citing a UBS analyst who reportedly called it a “turnaround stock.”

The analyst expects a compound annual growth rate (CAGR) of about 24% in EPS after the current fiscal. That growth rate could lead to upward revisions to EPS forecasts, said the report.

Earlier in the month, Barclays analyst Paul Kearney raised the firm's price target to $7 from $6 and kept an ‘Equal Weight’ rating following its Q3 report. “Stabilization and a refocus of the core innerwear business” along with paying down debt into next year were cited as considerations, TheFly reported citing the analyst.

Hanesbrands has a consensus price target of $7.2 based on the ratings of 10 analysts. 

Retail sentiment on the stock has been ‘neutral’ over the past day. Message volume was also tepid in the ‘normal’ zone.

For the most recent quarter, the apparel company's operating profit increased 27% to $103 million and the operating margin increased 255 basis points to 11.0% as compared to the prior year. 

Its EPS and revenues for the quarter beat consensus estimates, coming in at $937.1 million and $0.15 respectively. 

Hanesbrands, based in Winston-Salem, NC, employs 65,300 people internationally. Its stock has more than doubled year-to-date and has outperformed the broader indices.

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