Jefferies upgrades Kontoor Brands to Buy and raises price target after Lee Jeans sale
Jefferies lifted its rating on Kontoor Brands (KTB) from Hold to Buy and increased its price target to $89, up from $82. The upgrade follows the completed $750 million divestiture of the Lee Jeans brand to Authentic Brands, which will allow the company to focus on Wrangler and use the proceeds for share repurchases and debt reduction. Jefferies also expects Wrangler growth to exceed 4% annually over the next three years. The firm noted the stock trades at a 3.1% dividend yield and below its intrinsic value.
Why it matters
The rating upgrade and higher target suggest upside potential for the stock, which could attract buying interest. The $750 million cash from the Lee sale is earmarked for buybacks and debt paydown, potentially supporting the share price and improving the balance sheet.
Key facts
- 1Jefferies upgraded Kontoor Brands from Hold to Buy. investing.com
- 2Jefferies raised its price target to $89.00 from $82.00. investing.com
- 3The Lee Jeans brand was sold to Authentic Brands for $750 million. gurufocus.com
- 4Proceeds from the Lee sale will be used for share repurchases and debt reduction. gurufocus.com
- 5Jefferies forecasts Wrangler brand growth of more than 4% per year for the next three years. gurufocus.com
- 6Kontoor Brands offers a dividend yield of 3.01%. gurufocus.com
Summary written by AlphAI AI Desk from 3 of 3 sources. Not investment advice. Figures are as stated by the linked sources.