Hanesbrands Inc. designs, manufactures, sources, and sells a range of basic apparels for men, women, and children in the United States. The company operates through four segments: Innerwear, Activewear, Direct to Consumer, and International, which are comprised of bras, panties, shapewears, hosiery, mens underwear, childrens underwear, and socks; and other activewear, such as T-shirts, fleece, sport shirts, performance T-shirts and shorts, sports bras, and thermals, as well as licensed logo apparel in collegiate bookstores and other channels. The company was founded in 2005 and is based in Winston-Salem, North Carolina.
HBI Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Hanesbrands Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Hanesbrands Inc ranked in the 63th percentile in terms of potential gain offered. Moreover, under all the scenarios we modelled, the output consistently forecasted positive returns. As for the metrics that stood out in our discounted cash flow analysis of Hanesbrands Inc, consider:
The company's debt burden, as measured by earnings divided by interest payments, is 4.65; that's higher than 67.7% of US stocks in the Consumer Cyclical sector that have positive free cash flow.
Hanesbrands Inc's weighted average cost of capital (WACC) is 7%; for context, that number is higher than only 3.59% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
GES, BTN, CVGI, AIN, and SUP can be thought of as valuation peers to HBI, in the sense that they are in the Consumer Cyclical sector and have a similar price forecast based on DCF valuation.
B Riley FBR looks at the election implications in the apparel/footwear industry.A Democratic sweep is seen leading to a bigger stimulus package, higher corporate tax rates, restructuring trade alliances (rollback China tariffs, join TPP) and potential for increased employer costs.A Republican sweep is seen leading to further tax cuts (corporate...
Introduction Hanesbrands Inc. (HBI) has some of the most well-known brands in the United States. The company over the past five years has had strong growth in revenues and net income. Although the growth has been solid, the most important segment, innerwear, has seen a downtrend due to the collapse...
Andrew Cournoyer on Seeking Alpha | August 4, 2020