Fair Value Reduced as No-Moat Gildan’s Branded Strategy Struggles; Shares Overvalued
As competition intensifies, we’ve reduced our fair value estimate on no-moat Gildan from $30 to $23 (CAD 39 to CAD 30.50). The cut in our fair value estimate reflects our view that Gildan’s returns on invested capital are close to peak levels, as we believe Gildan’s brands do not provide pricing power and its production process provides no permanent cost advantage. The firm generates more than 80% of its operating income from the commoditized business of basic printwear. While it has improved op...Gildan Activewear is engaged in the manufacturing and selling of activewear, socks and underwear. Co. sells activewear products to screenprint markets in North America, Europe and other international markets. Co. is the supplier of activewear for the screenprint channel in the United States, Canada, Europe and Mexico. Co. sells socks and underwear, in addition to its activewear products, to mass market and regional retailers in North America.
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