JPMorgan sees shares of the Wrangler jeans maker gaining nearly 30%
Apparel company Kontoor Brands’ portfolio is at an “inflection point,” according to JPMorgan. The bank initiated coverage of the stock at an overweight rating on Monday. It also placed a $90 price target on shares, indicating a more than 28% gain from Friday’s close. Analyst Matthew Boss said the company’s narrow focus of brands — Wrangler, which produces jeans, and Helly Hansen, an outdoor apparel manufacturer — creates an opportunity for the company to accelerate growth. “We see revenue growth upside opportunity for Wrangler to improve to +low-to-mid-single- digit(+) growth (vs. our model at low-singles) & Helly to low-double- digits(+) growth (vs. our model at high singles) with narrowed management focus on the two brands,” Boss wrote in the note. KTB 1Y mountain Kontoor Brands 1-year. Kontoor’s portfolio narrowed after it agreed to sell its other denim brand Lee to Authentic Brands Group for $1 billion. Shares of Kontoor are off more than 20% since a January 2025 high. JPMorgan’s price target would put the stock nearly back at that level, but Boss sees upside to his forecasts. “We see fundamental upside to our ‘E,'” referring to earnings, “(notably with our prudent revenue growth forecasts), and upside to our multiple at 8.5x relative to the most recent precedent transaction (Lee sold to [Authentic Brands Group] at 10x [trailing 12-month] EBITDA announced on 5/21), which would support an upside equity value of $108,” Boss wrote.
