UPDATE: D.A. Davidson Reiterates Neutral Rating, Raises PT on Hanesbrands Following Encouraging Beat and Raise

In a report published Thursday, D.A. Davidson analyst Andrew Burns reiterated a Neutral rating on Hanesbrands HBI, and raised the price target from $115.00 to $118.00. In the report, D.A. Davidson noted, “HBI reported revenue and adjusted EPS of $1.401 billion and $1.73 (GAAP $1.16), compared to consensus at $1.414 billion and $1.68, and our estimates of $1.410 billion and $1.69. Revenue grew 17.0% (1% excluding acquisitions) year-over-year (y/y), driven by 62.7% growth in International (down 3% c.c. excluding acquisitions), 15.7% growth in Innerwear (up slightly excluding Maidenform), and 4.9% growth in Activewear. Adjusted gross margin expanded 193bp y/y to 37.1%, driven by supply chain efficiencies, Innovate-to-Elevate (I2E), and a one-month DBApparel contribution (+60bp). SG&A was up 23.9% to $303.3 million, representing 21.6% percent of sales (vs. 20.4% in 3Q13). 90bp of SG&A deleverage was due to DBApparel.” Hanesbrands closed on Wednesday at $110.01.
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Posted In: Analyst ColorPrice TargetAnalyst RatingsAndrew BurnsD.A. Davidson
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