Kontoor Brands, the parent company of Wrangler jeans, is receiving renewed attention from analysts as Jefferies upgraded its rating from neutral to buy and increased its price target from $82 to $89, indicating a potential 30% upside from the stock's recent closing price.
Analyst Blake Anderson highlighted that Kontoor is well-positioned for multi-year growth, particularly due to its specific strategies and the favorable risk-reward setup. Despite a 15% decline in shares over the past year amid concerns about demand for specialty retail products, Jefferies argues that the current valuation of approximately 10 times price to equity is overly pessimistic.
The firm points to growth opportunities in both the Wrangler brand and the recently acquired outdoor brand Helly Hansen, which is expanding in the U.S. market. Additionally, Jefferies analysts noted a revival in consumer demand for denim, which is now growing at rates that meet or exceed those of the broader apparel market, a significant shift after years of lagging behind.
With eight out of ten analysts rating Kontoor as a buy or strong buy, the consensus suggests a positive outlook for the company's stock as it capitalizes on these trends