Kontoor Brands: Hold Rating Amidst Maturity Challenges and Uncertain Growth Prospects

In a report released today, Jim Duffy from Stifel Nicolaus maintained a Hold rating on Kontoor Brands (KTB – Research Report), with a price target of $83.00.

Jim Duffy has given his Hold rating due to a combination of factors impacting Kontoor Brands. The company’s core business appears to be mature, with revenue trends reflecting this maturity, and the anticipated benefits from Project Jeanius are taking longer than expected to materialize. Additionally, the Lee brand did not achieve the growth expected in the second half of the fiscal year, and point-of-sale data turned negative in February, contributing to a cautious outlook.
Moreover, the guidance provided does not account for potential tariff impacts or the positive contributions from the Helly Hansen acquisition. While the acquisition is expected to be accretive, the estimates for the core business have been revised downward. At the current trading price, the shares are valued at a multiple that suggests a balanced risk-reward scenario, leading to the Hold recommendation.