Gildan Activewear Upgraded By Stifel Nicolaus Despite Risk Factors

Loading...
Loading...
Gildan Activewear
GLD
was upgraded from neutral to buy by Bank of America on Friday, prior to the opening bell. Also, Stifel Nicolaus raised its price target Friday morning, and upgraded the stock from hold to buy. Bank of America raises its price target from $61 to $68: “Our Buy rating is supported by the following earnings growth drivers 1) strong sales momentum driven mainly by market share gains in the basic apparel retail segment and significant capacity expansion to support the growth, 2) margin expansion from cost reductions and better sales mix, and 3) strong balance sheet supports capital return and/or earnings accretive acquisitions.” Stifel Nicolaus offered a higher price target, while also mentioning key risk factors: “Our 12 month price target of $72 is based on 17.5x our FY16 estimate of $4.12. In addition to other factors, key risks to our target price include the following: 1) Gildan operates in a highly competitive market with many players offering suitable substitute products, 2) revenue concentration with the top 10 customers generating 57.5% of FY13 sales, 3) cotton prices are highly volatile, with potential input cost increases negatively affecting gross margins, and integration risks related to acquisitions, 4) rapid growth of manufacturing capacity introduces operational risk and potential for fixed cost deleverage if sales don't materialize.” Currently the stock is up by 1.58 percent, and is currently trading at $59.39 in the Friday morning session. Based on Stifel's $72 price target, the stock may have 21.2 percent upside.
Loading...
Loading...
Posted In: UpgradesPrice TargetAnalyst Ratings
We simplify the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...