G-III Apparel Group (GIII), mcap=$945m, price $19.77 vs $24.48

Pitch:
– Manufacturer and marketer of branded apparel including DKNY, Calvin Klein, and Tommy Hilfiger.
– Sells through leading retailers (such as $M, $TJX) as well as own stores.
– Priced for bankruptcy despite healthy balance sheet, long-term growth track record, and 26% ROTE.
– Relative valuation discount to comps is unwarranted.

Valuation:
– Trades under 6x PE vs 17x pre-covid.
– At 15x earnings and $4.2 LTM EPS would be $63/stock.
– The recent acquisition of brands supports this valuation.
– Comp group ($COLM, $KTB, $PVH and $RL) sit at 9.5x PE and 6.5x EBITDA.

Exp. gain: +150% to $63/share.

Full GIII write-up (free guest account required):
https://www.valueinvestorsclub.com/idea/GIII_APPAREL_GROUP_LTD/6234085683

Published on: July 15, 2022  •  Published by:
Category:
Tags:

Leave a Reply