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Hanesbrands Inc. (NYSE:HBI): Poised For Long Term Success?

Simply Wall St

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In March 2019, Hanesbrands Inc. (NYSE:HBI) announced its earnings update. Overall, analysts seem fairly confident, with profits predicted to increase by 11% next year against the past 5-year average growth rate of -4.4%. Presently, with latest-twelve-month earnings at US$553m, we should see this growing to US$613m by 2020. Below is a brief commentary on the longer term outlook the market has for Hanesbrands. For those interested in more of an analysis of the company, you can research its fundamentals here.

Check out our latest analysis for Hanesbrands

What can we expect from Hanesbrands in the longer term?

The 13 analysts covering HBI view its longer term outlook with a positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of HBI's earnings growth over these next few years.

NYSE:HBI Past and Future Earnings, July 8th 2019

This results in an annual growth rate of 7.6% based on the most recent earnings level of US$553m to the final forecast of US$701m by 2022. EPS reaches $1.95 in the final year of forecast compared to the current $1.52 EPS today. Margins are currently sitting at 8.1%, which is expected to expand to 10% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Hanesbrands, there are three fundamental factors you should further examine:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is Hanesbrands worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Hanesbrands is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Hanesbrands? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.