Gildan Activewear (GIL) shares soared 5.5% in the last trading session to close at $53.13. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 8% loss over the past four weeks.
Gildan’s gains appear supported by improving fundamentals, including ongoing integration progress, tighter cost control and expected efficiency benefits. The company’s low-cost vertically integrated platform and healthy balance sheet also provide flexibility to manage macro uncertainty while pursuing synergy capture, which may be reinforcing investor confidence in its earnings outlook.
This apparel maker is expected to post quarterly earnings of $1.11 per share in its upcoming report, which represents a year-over-year change of +14.4%. Revenues are expected to be $1.6 billion, up 74.6% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Gildan, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on GIL going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Gildan is part of the Zacks Textile - Apparel industry. Ralph Lauren (RL), another stock in the same industry, closed the last trading session 0.7% lower at $403.85. RL has returned 26.8% in the past month.
Ralph Lauren's consensus EPS estimate for the upcoming report has changed +6.9% over the past month to $4.26. Compared to the company's year-ago EPS, this represents a change of +13%. Ralph Lauren currently boasts a Zacks Rank of #2 (Buy).
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Gildan Activewear, Inc. (GIL): Free Stock Analysis Report
Ralph Lauren Corporation (RL): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).