Citigroup Reiterates Buy Rating, $48 PT Ahead of Tuesday Report

In a report published Monday, Citigroup reiterated its Buy rating and $48.00 price target on Hanesbrands (NYSE: HBI).

Citigroup noted, “HBI is a margin expanding, deleveraging, and cash flow story. Now that we are beyond the high cotton costs we expect margins to expand from higher prices, Gear synergies, supply chain savings, and lower costs. We believe HBI could be a $4 earnings power stock by 2014. We also expect HBI to generate ~$5/sh in cash in 2012 and $3-4/sh in 2013, with which HBI will pay down debt and will drive P/E expansion. We believe there will be a ~$200M in cash left after debt pay down in 2013 that could be used for a dividend, share repurchase, or acquisitions.”

Hanesbrands closed on Friday at $37.74.

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