Here Is Why Hanesbrands Inc. (HBI) Earnings Reports Matter

On November 29, 2019, Hanesbrands Inc. (NYSE:HBI) shares lost -2.14% or -0.33 points to close at $15.07 with a thin trading volume of 1.909 million shares. It opened the trading session at $15.44, the shares rose to $15.49 and dropped to $15.045, the range by which the price of stock traded the whole day. The company now has a market cap of $5.56 billion and currently has 368.8 million outstanding shares. Hanesbrands Inc. (HBI) stock has plunged -5.99 percent of market value in 21 trading days.

HBI stock’s trailing 3-year beta is 1.16, meaning there will be a greater rate of return, although posing a higher risk. The part of a firm’s profit given to each outstanding share of regular stock was $1.58 share in the trailing 52 weeks. The stock’s value surged 20.27 percent year to date (YTD) compared to a decline of -4.8 percent in 52 week’s period. The firm’s shares are still trading -22.24 percent below its 1-year high of $19.38 and 30.25 percent up from 52-week low of $11.57. The average consensus ranking on the company is 2.6, on a ranging where 5 is equal to a consensus sell rating. In other words, the mean analyst recommendations are ranking this stock as a sell.

Hanesbrands Inc. (HBI) is most likely going to rise 17.78 percent in the coming 12 months, as per price target approximations compiled by finviz. Nevertheless, they have set the price target at a $26-month high price target. This represents a whopping 72.53 percent increase from the current trading of shares. The 52-week median price target given by the analysts is $16, which means a return possibility of 6.17 percent in comparison with the closing price of the stock of $15.07 on November 29. The lowest price set for the stock is $15 — just above -0.46 percent from HBI share price now.

Past records have indicated that shares in Hanesbrands Inc. declined on 20 different earnings reaction days and we have yet to see whether this trend will play out and remain in place when the company reports upcoming earnings. Investors will get the next hint of HBI’s Q4 earnings on January 21. Analysts are predicting revenue to suffer decline of -1.2 percent to $1.75B in the financial fourth quarter, while EPS will soar by about 6.25 percent to $0.51 per share. In the last quarter, it earnings of $0.45 per share came better than the $0.44417, adjusted, expected by Thomson Reuters consensus estimate. Revenue for the quarter was $1.77B, topping the $1.71B analysts had expected. Earnings are seen to rise by 7 percent this year, 0.23 percent in the coming year and the trend continues by 2.84 percent every year in the next 5 years.

Let’s take a glimpse at some insider activity at Hanesbrands Inc. (NYSE:HBI) and observe the pattern. The earliest insider trade happened on 10/22/2019. Upchurch W Howard Jr parted with a total of 93.26 thousand shares of the firm at average share price of $16.14. The total amount for the sale was set at $1.51 million. On completing this exchange, the Group President, IW Americas account balance was 427.23 thousand shares. The stock lost -6.63 percent from that insider sale. On 08/14/2019, JOHNSON JOIA M, Chief Admin Ofcr, GC&Corp Sec, did a purchase of 7.1 thousand shares at a price of $13.97 per share. This increased 99.19 thousand shares to the insider’s fortune and the stock experienced a 7.87 percent rally in price since the news became public. This exchange saw 510.23 thousand shares get into the Chief Admin Ofcr, GC&Corp Sec account.

On 08/07/2019, CEO Evans Gerald recorded a purchase transaction valued at $147.4 thousand. The purchase at $14.74 a share has added 10 thousand shares into the insider’s portfolio position. Meanwhile, shares price witnessed 2.24 percent increase since the transaction reporting date. The company insider is left with 1.66 million shares remaining in the account. Hytinen Barry, who works as CFO at the company, performed a purchase of 10 thousand shares in a transaction worth $175.6 thousand. The acquisition recorded on 05/08/2019 was priced at $17.56 per share. The stock price plunged -14.18 percent since the transaction. Hytinen Barry currently holds a stake of 176.31 thousand in HBI stock which is worth $2.66 million after the insider buying.

The stock is lingering around the initial support level of $14.91. After this, the following support is at the zone of $14.76. Up until the time the HBI stock hit levels beyond the current one, bulls should have no alarm. In terms of its momentum, the stock’s RSI hit 47.05 on the daily chart, and this may be a cause for concern. In case the price goes below $14.76 level on closing basis, there may be more profit booking with the stock growing weaker. Still, getting to the $15.36 level may cause a pull-back move approaching $15.65 mark.

Hanesbrands Inc. (HBI) shares are trading at a P/E ratio of 9.4 times earnings posted in the trailing 12 months. The industry HBI deals with has an average P/E of 22.5. Its P/B ratio is standing at 4.4X compared to the 3.9 industry average. It is additionally sporting a 0.8 on the Price-to-Sales ratio, compared to the industry’s P/S average of 1.5. Hanesbrands Inc. has a 39.5% gross profit margin, with its operating margin around 12.8%. Alongside this, the company’s net profit margin currently stands at 8.3%.