Needham Starts Kontoor Brands (KTB) at Hold

Needham analyst Tom Nikic initiates coverage on Kontoor Brands (NYSE: KTB) with a Hold rating.

The analyst comments "We are initiating coverage of KTB shares with a Hold rating. There are some intriguing aspects of the business: they have exposure to two of the better sub-sectors in Softlines (Wrangler in denim/Western, Helly Hansen in outdoor), Helly has a compelling long-term growth opportunity in the U.S., and we think the divestiture of the Lee brand is addition by subtraction. On the flip side, M&A in Softlines has proven extremely challenging over the years, so we think it's worth waiting to see how well they integrate and execute on Helly Hansen's growth strategies. Additionally, the "Super El Nino" weather pattern presents some risk to Helly this Fall/Winter. Also, we don't love Wrangler's wholesale-dependent distribution amid the uncertainty in the macro environment. We think it's prudent to wait a bit before considering becoming constructive."

For an analyst ratings summary and ratings history on Kontoor Brands click here. For more ratings news on Kontoor Brands click here.

Shares of Kontoor Brands closed at $72.94 yesterday.

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