G-III 'Setting The Stage For A Revival,' Wunderlich Says Buy

Wunderlich reiterates its Buy rating and $33 price target on the shares of G-III Apparel Group, Ltd. GIII, saying the company is setting the platform for revival after a tough 2016.

“We believe, after a tough 2016, that the company is once again setting the stage for a return to prominence, driven by realistic expectations and a number of key catalysts that could drive upside,” analyst Eric Beder wrote in a note.

Store Closures And Outlets

G-III is aggressively closing doors and creating the potential for a return to profitability in the outlets, which accounts for less than 20 percent of sales.

DKNY And Tommy Hilfiger

The return of cold weather is stabilizing outerwear results, and the focus now is on the DKNY "white" label of product for key department stores for fall 2017. Longer term, G-III will return Donna Karan to the contemporary segment via the rollout of a "black" label line.

Beder noted that FY 2018 will be the first full year of the company controlling the Tommy Hilfiger women's line.

“We look for FY18 to see a material ramp at Tommy Hilfiger; management considers the brand a $1 billion opportunity,” Beder highlighted.

Shares of G-III closed Tuesday’s trading at $29.38.