Clothing maker HanesBrands (NYSE:HBI) jumped just over 3% in premarket trading today after getting a boost from new analyst projections. The momentum carried into this morning's session, though some profit-taking seemed to be in play. The latest analyst uptick joins a chorus of positive opinion around the company from financial analysts, who have marked HanesBrands as a “buy” for over a year now.
HanesBrands Inc. Stock Proves Ever More Attractive to Analysts
The biggest driver for HanesBrands' recent gains is new analysis issued from Wells Fargo by way of its analyst, Ike Boruchow, and his team. Wells Fargo has adjusted its rating on HanesBrands up from “equal weight” to “overweight,” and this is thanks in large part to Wells Fargo's assessment of the current leadership at HanesBrands.
HanesBrands' overall direction has also proven noteworthy for Boruchow and the team, as the analysis notes that, for the first time in “many years,” Wells Fargo sees a “...clear path to potential upside...” for the company. Boruchow and team then ticked off the points supporting that analysis, noting that the company's position in innerwear is on the rise and that the company has clearly demonstrated that the Champion brand has substantial and sustainable growth potential. This point dovetails well with moves seen back in June, as HanesBrands got together with Amazon (NASDAQ:AMZN) to file 13 separate lawsuits connected to the sale of Champion goods that proved to be counterfeit.
Additionally, Boruchow and team pointed to recent moves from HanesBrands to support reinvestment, including modifying its marketing as well as engaging in capex spending to support supply chain measures. A move to “simplify” its business model also helped, as HanesBrands looked to divest several assets considered “non-core,” among other measures.
In the end, Wells Fargo not only upgraded its rating of HanesBrands, but also its price target, looking for the company to hit $23 per share, with a bull case looking for further growth to between $25 and $30 per share.
What Are Financial Analysts Saying About HBI Stock?
All of this is a very positive development for HBI stock, but it's far from the only such development around. In fact, the broader financial analyst pool—based on our latest research—puts HanesBrands as a consensus “buy”, which has been the case since June 2020.
A year ago, HanesBrands had one “strong-buy” rating, five “buy” ratings, five “hold”, and one “sell.” Six months ago, that shifted slightly to one “strong-buy”, five “buy”, three “hold” and one “sell.” Today, we're at one “strong-buy”, five “buy”, and two “hold”. The “buy” side has remained static for a year, while selling pressure has disappeared, and even holding patterns are waning.
The HanesBrands price target, meanwhile, holds a quite narrow range. The current consensus is $20.13, with a high of $26 and a low of $14.
So far this year, the movement has been completely positive for HanesBrands. The upgrade from Wells Fargo was just the latest; Stifel Nicolaus, back in May, upgraded from “hold” to “buy” and bumped up its price target from $18 to $25. Credit Suisse, Barclays and Deutsche Bank Aktiengesellschaft all upgraded their price targets, and back in February, B. Riley not only reiterated its “buy” rating on the stock, but also raised its price target from $19 to $22. In fact, out of all the price target changes this year, only one—Deutsche Bank—upgraded to a target under $22. That $14 price target mentioned earlier was established by Bank of America back in July 2020.
As for less formal analysis, hedge funds have been buying in at elevated rates. In recent months, five more hedge funds went long on HanesBrands, and the company was in 32 separate portfolios at the end of March, reports note. While the all-time high for portfolio entries is 42, it's clear HanesBrands is making inroads with institutional investors.
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