Hanesbrands improved sales at major retailers such as Walmart and potential market share gains from Victoria’s Secret store closings

Hanesbrands Inc. HBI,
+ 11.87%
Shares rose 5.6% in pre-market trading on Wednesday after it was upgraded to a strong market buy in Raymond James based on its distribution to major retailers and possible market share gains from closings. from Victoria’s Secret stores. Raymond James is priced at $ 20 on Hanesbrands. Analysts list a number of company advantages, including its strong brands, including Hanes and Playtex, and the scale of the business. Hanesbrands also records 25% of its sales at Walmart Inc. WMT,
+ 0.35%
and Target Corp. TGT,
+ 1.64%.
“[B]others are operating near all-time high valuation levels, indicating that the market believes they are retail winners and that probably implies that their biggest selling partners should also be winners, “said Raymond James. Walmart closed Tuesday at $ 132.01, an increase of 11.1% over the year, while Target closed at $ 120.08, up 6.3% for 2020 thus far. L Brands Inc. LB,
+ 4.05%,
Victoria’s Secret’s parent company announced earlier this year that 250 of those stores will close in the United States and Canada. Raymond James believes this will benefit Hanesbrands and its portfolio of intimate brands. And the Hanesbrands Champion label, which had been sold at Target, has an agreement with Amazon.com Inc. AMZN,
-2.85%.
Analysts say sales could increase as online shopping increases during the coronavirus pandemic. Hanesbrands shares fell 15.5% in the year to date, while the S&P 500 SPX index,
+ 0.36%
it has slipped 1% during the period.