Hanesbrands Loses A Longtime Bull

Not even Michael Jordan can save Hanesbrands Inc. HBI.

The apparel brand has significantly underperformed the market in 2017 and things might not get better anytime soon.

The Analyst

Citibank's Kate McShane downgraded Hanesbrands from Buy to Neutral and lowered price target from $29 to $23.

The Thesis

Citing organic revenue trends and cash generation fears, McShane has become less bullish on Hanesbrands prospects over the next 12 months.

With a relatively weak ecommerce platform, the analyst doesn't believe the company can fully recoup the loss of sales in-store via online channels.

“The US Wholesale environment remains challenging due to declining traffic trends in stores and price-based competition in all channels,” McShane said in a note. “HBI remains a show-me story and with earnings and cash flow typically second-half weighted, it’s likely to take time for investors to get constructive on the name.”

The analyst lowered 2018 and 2019 EPS estimates and noted that substantial risk remains pertaining to the company stax rate under the new U.S. tax proposals.

Hanesbrands came in as the No. 11 name on Citi’s apparel and footwear coverage list.

Barring any big M&A activity, Hanesbrands doesn't appear to have much to be excited about heading into the next year.

Price Action

Hanesbrands shares closed down 1.1 percent at $20.87.

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