The Zacks Analyst Blog Highlights: HanesBrands, Retail giant Gap, Ralph Lauren and Canada Goose

Zacks Equity Research

For Immediate Release

Chicago, IL – April 9, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: HanesBrands HBI, Retail giant Gap GPS, Ralph Lauren RL and Canada Goose Holdings GOOS.

Here are highlights from Wednesday’s Analyst Blog:

4 Apparel Stocks Offering PPE Amid Coronavirus Crisis

With more and more American citizens testing positive for the novel coronavirus and the nation’s death toll surpassing 12,000, U.S. hospitals and healthcare facilities are experiencing an acute shortage of personal protective equipment (PPE), including masks and gowns.

In light of the ongoing supply crunch situation, a handful of apparel companies have stepped up to provide support by shifting their production lines from making apparel to manufacturing face masks and gowns.

What’s the Role of Apparel Stocks?

Considering the rapid spread of the virus, the Centers for Disease Control and Prevention (CDC) has recommended Americans to cover their faces when they are outside their homes, especially around other people.

However, experts like U.S. Surgeon General Jerome Adams suggests that critical supplies like N95 masks must be reserved for doctors, nurses and other medical first responders.

In this context, CDC has advised that if N95 or other surgical masks are unavailable, healthcare providers may use homemade masks as a last resort.

Now, traditional mask manufacturers like 3M and Honeywell are already bogged down by immense pressure of manufacturing millions of high-quality face masks for front-line healthcare workers, having pledged to support the U.S. government.

Apparel companies have come forward to fill in the void. They are using their knowhow and supplier base to manufacture new masks and gowns or to transfer their own supply of masks to front-line healthcare workers or both.

Stocks in Focus

Here we are discussing four apparel companies that are doing their bit to tackle the crisis. The fact that each one of them boasts a solid long-term earnings growth rate makes them more attractive to investors. Moreover, their share price has shot up more than 10% since Apr 3, reflecting investor confidence in these stocks.

Per a report by CNBC, HanesBrands is part of a consortium of apparel manufacturers with a contract with the U.S. federal government to produce cotton masks. HanesBrands aims to produce 1.5 million masks weekly while the entire consortium will produce 5 million to 6 million masks each week, using HanesBrands’ design and patterns. Of the more than 320 million masks the company expects to make, approximately 10 million have been delivered and the company is ramping production to make approximately 40 million per week. The company boasts a solid long-term earnings growth rate of 3.3% and has witnessed a 16.6% rise in its share price.

Retail giant Gap is working on solutions to use any excess garment production capacity to produce additional fabric masks and protective gear. Moreover, the parent company of Gap, Old Navy, Banana Republic, Athleta and other brands have built a small team with members from its different brands and functions, along with California hospitals, to use Gap’s connections in the global supply chain to get protective masks and gowns. This company boasts a solid long-term earnings growth rate of 12% and witnessed a 23.4% increase in its share price.

Ralph Lauren is ramping up production to meet the target of manufacturing 250,000 masks and 25,000 isolation gowns. This company boasts a solid long-term earnings growth rate of 15% and has witnessed a 21% rally in its share price.

Canada Goose Holdings aims to manufacture scrubs and gowns for medical professionals at two of its manufacturing facilities, in Toronto and Winnipeg, with the opportunity to extend production across additional facilities as needed.  Approximately 50 employees per facility will work to manufacture the gear. It has an initial goal of producing 10,000 units. This company boasts a solid long-term earnings growth rate of 20.7% and has witnessed 11.1% increase in its share price.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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The Gap, Inc. (GPS) : Free Stock Analysis Report
 
Ralph Lauren Corporation (RL) : Free Stock Analysis Report
 
Hanesbrands Inc. (HBI) : Free Stock Analysis Report
 
Canada Goose Holdings Inc. (GOOS) : Free Stock Analysis Report
 
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