April 16 Shares of underwear maker HanesBrands
Inc are poised to produce a total return of around 25
percent over the next two years after a disappointing quarter
that has prompted a sell-off, Barron's said on Sunday.
The estimate factors in the company's annual dividend payout
of 60 cents per share after a 36 percent increase in January.
HanesBrands missed its fourth-quarter earnings estimates in
February, largely because brick-and-mortar retailers have been
dialing back their inventories and buying fewer HanesBrands
The stock is down around 40 percent since April 2015.
But the company's long-term prospects remain healthy,
Barron's said. HanesBrands has not lost market share, and the
destocking cycle among retailers will come to an end.
HanesBrands' earnings may get a near-term boost as it
integrates several acquisitions, Barron's said. It could also
benefit from boosting international sales, which make up only
about 30 percent of its revenue, Barron's said.
HanesBrands has spent $2.3 billion on five acquisitions
since 2013, including Australian underwear maker Pacific Brands
and Champion Europe. It could save $85 million by mid-2019 from
those deals, Barron's said.
Short sellers have sold about 10 percent of HanesBrands'
outstanding shares on speculation that it could be hurt by the
growing popularity of online shopping, Barron's said. It also
carries a debt load of around $3.5 billion in long-term debt.
(Reporting by Carl O'Donnell; Editing by Richard Chang)