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Gildan Is D.A. Davidson's Top Active Lifestyle Stock

Courtesy of Benzinga.

Gildan Is D.A. Davidson's Top Active Lifestyle Stock

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In a recent report, D.A. Davidson analysts focused on the outlook for the active lifestyle industry.

Basic apparel earnings season kicks off this week when Hanesbrands Inc. (NYSE: HBI) reports earnings on January 29, and analysts gave their take on Hanesbrands and Gildan Activewear Inc (USA) (NYSE: GIL).

Favorable Q4 Environment

Analysts believe that the economic conditions for retailers in 4Q14 were favorable and explain that the overall basic retail environment was solid for the quarter.

Analysts believe that both Hanesbrands and Gildan had opportunity to gain market share in the quarter. Analysts see upside earnings potential to consensus estimates for both companies.

2015 Outlook

Analysts noted that falling cotton prices will likely have a material impact on costs in the second half of 2015.

They believe that low cotton prices could lead to margin growth opportunities but could also provide retailers with opportunities to drop prices in an attempt to gain market share.

Growth Ahead For Gildan

Analysts see significant growth potential and a strong track record of performance for Gildan and believe that the stock’s current share price doesn’t fully reflect the company’s value.

Davidson analysts are slightly below consensus with their revenue projection of $400.2 million for Q4, but predicts a slightly smaller earnings loss than consensus at ($0.30) per share. Davidson rates Gildan a Buy and has a $68 price target for the stock.

Related Link: Has Warren Buffett Lost His Touch? Not Even Close

Limited Upside For Hanesbrands

Analysts are projecting Q4 earnings of $1.41 per share on $1.561 billion in revenue, nearly in-line with consensus estimates. Davidson’s price target for Hanesbrands stock of $118 is based on a 17x multiple on their 2016 earnings estimates.

With the stock currently trading around $112, analysts see limited upside to the stock from current levels and assign Hanesbrands a rating of Neutral.

Latest Ratings for GIL

Date Firm Action From To
Nov 2014 Citigroup Maintains Neutral
Aug 2014 Stifel Nicolaus Upgrades Hold Buy
Aug 2014 Bank of America Upgrades Neutral Buy

View More Analyst Ratings for GIL
View the Latest Analyst Ratings

Posted-In: DA Davidson & CoAnalyst Color Long Ideas Analyst Ratings Trading Ideas Best of Benzinga

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