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A world-wide fast vogue study executed by UBS showed sturdy effects for Kontoor Brands’ (NYSE:KTB -1.3%) Wrangler and Lee brand names in an indicator that the organizations have a great deal of area to develop and get current market share from Levi.
Analyst Jay Sole and staff concede that there is elevated risk that inflation and decelerating industry revenue progress could strain the industry in the around expression, nonetheless, UBS thinks buyers will glance for significant top quality branded firms buying and selling at deep bargains to historic amounts if the sector turns. KTB is referred to as a solid preference if that comes about and the around-expression panic over the attire manufacturer’s publicity to Walmart and Concentrate on fades.
UBS has a Get score on KTB and rate concentrate on of $78, which reps more than 130% upside potential.
The UBS bull thesis: “Kontoor Models has two widely recognized denim makes and has strengthened its situation as a person of the primary gamers in the class. We believe the marketplace fails to recognize how KTB is transitioning into a advancement stock from a money circulation stock. We model a 10% 5-yr. EPS CAGR. As KTB’s growth surprises to the upside, we feel its P/E will probable broaden to 13x from 6x.”
See all the valuation metrics on KTB.