Raymond James reiterated its Strong Buy on Gildan Activewear Inc (USA) GIL shares and expects the apparel firm's second quarter earnings above consensus.
Gildan is expected to announce its second quarter financials on July 27. Raymond James expects EBITDA of $148.9 million and EPS of $0.43, which are a touch above consensus of $146.6 million and $0.42, respectively.
The brokerage projects quarterly sales of $708.3 million, above consensus of $701.2 million. The estimate is predicated on continued share gains in Retail, partially offset by lower Printwear selling prices.
"We believe that Gildan's continued share gains in Retail, material cotton tailwind, and sharp recovery in US consumer confidence are supportive of our 2Q16E," analyst Kenric Tyghe wrote in a note.
"While US retail trends remain mixed, solid in-quarter US consumer confidence we believe supports growth in the basics categories," Tyghe added.
For 2016, the analyst expects earnings of $1.64 a share on revenue of $2.657 billion. Wall Street expects earnings of $1.59 a share on revenue of $2.67 billion.
Tyghe's bullish thesis on GIL shares is predicated on: "(i) continued new account wins and shelf space gains, (ii) improving manufacturing efficiencies, and (iii) a material cotton tailwind through 2016E."
The analyst has a price target of $35, implying a potential return of 12 percent over Tuesday's close.
Ratings data available on Benzinga Pro.© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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