Gildan Activewear (GIL) Stock Forecast & Price Target

Gildan Activewear's acquisition of Hanesbrands is anticipated to enhance its market share and operational efficiency, supporting a strong outlook for value creation through 2026 and beyond, as indicated by a projected P/E ratio of 13.1x. The combined entity is expected to generate approximately $6.9 billion in annual revenues, with nearly equal contributions from both Gildan and Hanes, thereby diversifying its revenue streams and bolstering resilience against market fluctuations. Additionally, potential for margin expansion and capital returns, coupled with improvements in organic revenue growth, further solidifies a positive long-term financial trajectory for Gildan.

Gildan Activewear faces a challenging outlook due to potential trade policies that could impact its key manufacturing regions, as well as the risk of a prolonged economic recession, which may significantly reduce industry volumes. Additionally, rising raw material costs, particularly for cotton, are expected to lead to margin compression, thereby affecting profitability. The company is also grappling with the difficulty of achieving sustainable growth for its newly acquired rival, Hanesbrands, which has already demonstrated declining revenues in recent years.