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UPDATE: Goldman Sachs Initiates Hanesbrands at Buy on Valuation

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In a report published by Goldman Sachs, analyst Taposh Bari initiated coverage on Hanesbrands (NYSE: HBI) with a Buy rating and $50 price target.

Goldman Sachs reported that, “We see the HBI investment story evolving from cotton sensitivity to capital allocation over the next 12 months. Gross margins still have a few quarters of upside as the company anniversaries a difficult 2012 for the Outerwear segment. The story only accelerates once that ends, however. The company is expected to prepay the remaining $250 mn of its 2016 senior notes by year‘s end. That event will liberate management to redeploy its 12% free cash flow yield to equity holders. The first order of business is likely a 2% dividend (20-25% of free cash flow). We expect the remaining 75-80% to be distributed through a combination of share buybacks and bolt-on M&A.”

Shares of HBI closed at $42.03 on Thursday.

Latest Ratings for HBI

DateFirmActionFromTo
Sep 2014WunderlichInitiates Coverage onBuy
Sep 2014CitigroupMaintainsBuy
Jul 2014CitigroupMaintainsBuy

View More Analyst Ratings for HBI
View the Latest Analyst Ratings

Posted-In: Goldman SachsAnalyst Color Initiation Analyst Ratings

 

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