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Research Alert: CFRA Maintains Sell Opinion On Shares Of Hanesbrands, Inc.

05/11/2021 11:17

03:15 PM EDT, 05/11/2021 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We up our 12-month target by $2 to $14, 8.9x our 2022 EPS estimate of $1.57 (up from $1.47), below 5-year historic average. We lift 2021's to $1.50 from $1.23. HBI posts Q1 EPS of $0.39 vs. $0.07, beating consensus. Sales increased 25% to $1.5B, beating consensus, with U.S. Activewear, +26%; International, +18%; U.S. Innerwear, +35%. HBI also unveiled today a three-year growth plan intended to drive roughly $1.2B in incremental revenue and expand operating margins to 14.3% by 2024. We maintain Sell to reflect our concerns on HBI's ability to meet these expectations due to the under-appreciated trend of mass retailers shifting toward private labels and tightening branded assortments (e.g., TGT, which accounted for 11% of 2019 sales, exited C9 Champion in 2020, and we see WMT, 15% of 2020 sales, and other key partners following suit). This trend is accelerated with store consolidation and exacerbated for HBI due to over-reliance on wholesalers (72% of 2020 sales) and under-development of its own digital site.