Gildan Activewear (GIL) Stock Forecast & Price Target

Gildan Activewear's acquisition of Hanesbrands is anticipated to enhance its competitive position and drive market share gains, with a projected 2026 P/E ratio of 13.1x indicative of potential value creation over the next few years. The combined entity is expected to generate approximately $6.9 billion in annual revenues, showcasing a balanced revenue contribution of around 49% from Gildan and 51% from Hanes, thereby increasing diversification across various channels and product offerings. Furthermore, expectations of significant margin expansion through manufacturing efficiencies and a favorable outlook for capital returns contribute positively to Gildan's long-term financial viability despite existing macroeconomic uncertainties.

Gildan Activewear faces a negative outlook due to three key factors: potential trade policies targeting its manufacturing jurisdictions, which could disrupt operations; a prolonged economic recession that may lead to a significant decline in industry volumes and discretionary spending; and rising raw material input costs, particularly cotton, which could result in margin compression. Additionally, the company's recent performance has shown revenue declines, with organic constant currency revenues decreasing by -5.7% in 2022 and -8.6% in 2023, raising concerns regarding its future growth trajectory following the acquisition of Hanesbrands. As management targets a modest revenue CAGR of 3%-5% through the 2026-2028 outlook period, the persistent pressures from a deteriorating macroeconomic environment further exacerbate the company's challenges.