Kontoor Brands (KTB) shares have declined since the company's Q4 report, but strong brand demand supports a positive long-term outlook despite tariff concerns, UBS Securities said in a report Friday.
"We believe 4Q result underscored solid underlying demand for its brands, as shown by ongoing [point-of-sale] share gains and [direct-to-consumer] sales growth acceleration," UBS said, adding that the pending acquisition of Helly Hansen, a global outdoor and workwear brand, serves as a potential catalyst for long-term growth.
Kontoor Brands reported Tuesday fiscal Q4 adjusted earnings of $1.38 per diluted share, up from $1.28 last year, with net revenue rising to $699.3 million from $669.8 million.
The brokerage outlined a broad range of 2025 earnings per share outcomes, with a best-case scenario of $5.45 and a downside of $4.50. Market sentiment currently leans toward the latter, though tariff mitigation strategies could drive earnings before interest and taxes margin recovery from 2026 onward, UBS said.
UBS maintained a buy rating on Kontoor Brands, and cut its price target to $96 from $108.
Price: 66.19, Change: -1.08, Percent Change: -1.61
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