Buy HBI? Yes! The Bull Case for Hanesbrands.

  • Hanesbrands’ (HBI) CFO is departing, but it’s not due to anything scandalous or problematic.
  • The company’s preliminary fourth-quarter 2022 outlook indicates resiliency for Hanesbrands.
  • Investors should grab some shares of HBI stock while they’re still dirt cheap.
HBI stock - Buy HBI? Yes! The Bull Case for Hanesbrands.

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Can a company that sells underwear, sweatpants and T-shirts help you build wealth in 2023? Don’t count Hanesbrands (NYSE:HBI) out as the company’s financial outlook might surprise you. Plus, HBI stock is absurdly cheap at its current price point. You’ll probably regret it if you miss out on Hanesbrands’ potential comeback, which appears to already be in progress.

Hanesbrands is a well-known apparel provider, and 2022 was supposedly a year when defensive consumer staples stocks performed well. Yet, Hanesbrands disappointed many investors last year. Will this year be any different?

Instead of fretting over what’s in the rearview mirror, consider the bargain that’s right in front of you. Just as there’s value in Hanesbrands’ products, there’s equally good value for investors, and this underappreciated apparel business looks like a big winner in the making.

What’s Happening With HBI Stock?

HBI stock got cut in half last year, so we can dispense with the idea that all consumer defensive stocks performed well in 2022. Yet, the Hanesbrands share price appears to be rebounding in 2023, having bounced from $6 and change to $8 recently.

At least investors get to collect sizable distributions while they wait. If you can believe it, Hanesbrands’ forward annual dividend yield is 7.39%. Even mega-cap energy companies and real estate investment trusts (REITs) don’t typically pay that much.

Furthermore, Hanesbrands’ trailing-12-month price-to-earnings (P/E) ratio of around 8x is quite low. Value seekers should be jumping at the chance to own a few shares of HBI stock now.

And, don’t fret over Hanesbrands’ CFO stepping down. Michael Dastugue is resigning for family-related reasons, so there’s nothing problematic going on here. C-suite transitions aren’t always scandalous, after all.

Hanesbrands’ Outlook Suggests Positive Quarterly Results

Additionally, Hanesbrands just released its preliminary outlook for the company’s fourth-quarter 2022 financial results. Stock traders cheered Hanesbrands’ positive outlook, sending the share price higher.

First, let’s crunch the numbers. Hanesbrands anticipates that its quarterly sales will come in “slightly above” the upper end of its expected range, which is $1.4 billion to $1.45 billion. Turning to the bottom line, Hanesbrands envisions quarterly adjusted earnings per share (EPS) of 4 cents to 11 cents.

In other words, Hanesbrands’ management expects to report surprisingly robust revenue and a pretty good profit. Moreover, Hanesbrands CEO Steve Bratspies announced “plans to refinance upcoming maturities as well as increase cost savings.”

What You Can Do Now

The CEO’s announcement indicates that Hanesbrands will be proactive in bolstering its finances. This, along with Hanesbrands’ preliminary quarterly outlook, should encourage the company’s long-term investors.

Yes, it’s true that HBI stock didn’t perform well in 2022. However, Hanesbrands now offers a terrific dividend and an unmistakable value proposition. Therefore, it’s a great time to buy a handful of Hanesbrands shares in anticipation of a continued rebound in 2023.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.

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