HBI
Hanesbrands Inc.
$6.47
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Undervalued
Trading 61.7% below fair value
You pay
$6.47
Bear
$13.50
Fair
$16.88
Bull
$20.25
Bear
$13.50
+108.7%
$1.40 × 12x P/E
Fair
$16.88
+160.8%
$1.40 × 15x P/E
Bull
$20.25
+213.0%
$1.40 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
4.6x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $7.25 from 34 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $16.88 per share.
Warnings
Wall Street's average price target is $7.25 (from 34 analysts). Our estimate is 190% above the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples