May 19, 2009
UBS raises Gildan Activewear to buy
May 19, 2009
May 19 (Reuters) - UBS upgraded Gildan Activewear Inc (GIL.TO) to "buy" from "neutral" on improving margins outlook for the T-shirt maker and its strong performance in retail and international markets.
Gildan Activewear Spring 2009
Gildan has achieved sales growth in most international markets despite challenging economic conditions, analyst Vishal Shreedhar wrote in a note to clients.
The company's retail performance was also strong with flat year-on-year sales despite product-line rationalization, and the implication is positive for long-term growth, he said.
"Gildan is gaining U.S. market share at an accelerating rate, which we believe underscores Gildan's exceptional manufacturing and supply chain capabilities."
He said outlook for Gildan's margins is improving and the company would benefit from lower commodity prices in the first half of 2010.
Shreedhar raised his price target on the stock to C$19 from C$15.00.
Shares of the company were up 9 percent at C$17.25 in morning trade Tuesday 19 May on the Toronto Stock Exchange. (Reporting by Ashutosh Joshi in Bangalore; Editing by Vinu Pilakkott)
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