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Here’s Why Hanesbrands Stock Fell 8.8% after 3Q17 Results

Sonya Bells - Author
By

Aug. 18 2020, Updated 5:28 a.m. ET

HBI’s stock performance

Hanesbrands (HBI) stock fell 8.8% on November 2, 2017, since its fourth-quarter guidance failed to meet market expectations. Its earnings, however, met expectations on both the top and bottom lines.

HBI is currently trading at $20.08, which is a YTD (year-to-date) loss of 6.9%. In comparison, branded apparel peers PVH Corp (PVH), VF Corp (VFC), Tapestry/Coach (TPR), and Ralph Lauren (RL) have risen 41%, 31%, 18%, and 1.6%, respectively.

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HBI’s ratings have gone down

HBI is covered by 15 Wall Street analysts, who have rated the stock a 2.3 on a scale of 1 (“strong buy”) to 5 (“sell”). The company’s ratings have gone down over the last month following downgrades from Wells Fargo and Oppenheimer.

There weren’t any recommendation changes after HBI’s 3Q17 results. But several analysts lowered their target prices for the company as follows:

  • Wells Fargo: from $23 to $22
  • Morgan Stanley: from $24 to $23
  • Instinet: from $24 to $21
  • Barclays: from $31 to $26

HBI continues to be better rated than VFC Corp (rated 2.5) and Ralph Lauren (rated 3.0). PVH Corp has a better rating of 1.9.

Wall Street recommendations

About 47% of the analysts covering HBI stock, including Deutsche Bank and Barclays, are recommending a “buy” for the stock. The remaining 53% are recommending a “hold,” and none of them are recommending a “sell.” Cowen, Goldman Sachs, and Morgan Stanley are recommending a “hold” for the stock.

In comparison, 39% of the analysts are recommending a “buy” for VFC stock, and 10% are recommending a “buy” for Ralph Lauren. PVH Corp has received more “buy” recommendations than other apparel stocks, with 78% of analysts recommending a “buy.”

Investors who want exposure to HBI can consider pooled investment funds such as the PowerShares Contrarian Opportunities ETF (CNTR), which invests ~0.7% of its portfolio in HBI.

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