Analyzing Gildan, Transat, and Manuvie: Analyst Recommendations and Stock Market Predictions

2023-12-12 17:13:33

On Monday, the company’s stock slipped 10.86%, or $5.39, ending the day at $44.22 on the Toronto Stock Exchange. (Photo: courtesy)

What to do with the titles of Gildan, Transat and Manuvie Sportswear? Here are some analyst recommendations likely to move prices soon. Note: the author may have a completely different opinion than that expressed by the analysts.

Gildan sportswear (GIL, $44.58): a surprise that doesn’t change the game

National Bank Financial’s Vishal Shreedhar isn’t surprised that investors have taken a cool look at the news that Gildan Sportswear’s 19-year president, Glenn Chamandy, is leaving.

On Monday, the company’s stock slipped 10.86%, or $5.39, ending the day at $44.22 on the Toronto Stock Exchange.

To (re)read: Vince Tyra named President and CEO of Gildan Sportswear

This “abrupt” end of contract is the result of a disagreement between Glenn Chamandy and his board of directors who had been trying for many years to adopt a succession plan, without success. At the time the organization announced his departure, the ex-president suggested in a separate statement that he had been shown the door for no valid reason.

The 61-year-old co-founded the company in 1984.

Thus, apart from the compensation that the company will probably have to pay to its former manager, this departure should not change Gildan’s performance on which the analyst is banking.

The latter remains convinced that the Montreal company’s earnings per share should grow in 2024. More optimistic than the consensus, he expects the growth rate of its revenues to reach 6.5%, and that the company reduces its production costs, like those of its raw materials, and gains in efficiency during the next financial year.

Additionally, Vince Tyra, its next CEO, appears to have the skills and experience to enable the company to deliver on its promises.

In the past, the one who takes office on February 12, 2024 has been senior vice president of corporate strategy and mergers and acquisitions at the holding company Houchens Industries, as well as an operating partner at Southfield Capital, reports the analyst .

Vishal Shreedhar adds that Vince Tyra ran one of Gildan’s main clients, alphabroder, as well as Fruit of the Loom before its move to Berkshire Hathaway.

The analyst maintains his recommendation of “sector outperformance” and his target price of $52, or 11.5x his earnings per share for the 2024-2025 financial year. He points out that Gildan’s stock is currently more affordable than usual, worth 10.9x its earnings per share for the next 12 months, while the multiple rather exceeds 16x.