The consensus price target hints at a 33.3% upside potential for Kontoor (KTB). While empirical research shows that this sought-after metric is hardly effective, an upward trend in earnings estimate revisions could mean that the stock will witness an upside in the near term.
Kontoor Brands, Inc. has continued to report similar trends across the two older brands. Wrangler is growing relatively well, but Lee's revenues are still on the decline. Helly Hansen creates significant long-term growth potential for KTB. KTB has high ambitions for the brand, especially from 2027 forward. I estimate KTB stock to have 35% upside to $94.3, driven by Helly Hansen's growth potential.
Kontoor (KTB) is well positioned to outperform the market, as it exhibits above-average growth in financials.
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
The consensus price target hints at a 27% upside potential for Kontoor (KTB). While empirical research shows that this sought-after metric is hardly effective, an upward trend in earnings estimate revisions could mean that the stock will witness an upside in the near term.
Here is how Kontoor Brands (KTB) and Laureate Education (LAUR) have performed compared to their sector so far this year.
Kontoor (KTB) possesses solid growth attributes, which could help it handily outperform the market.
Kontoor Brands, Inc. (KTB) Q4 2025 Earnings Call Transcript
Kontoor Brands remains a 'hold' as recent revenue gains are offset by declining profitability and cash flow post-Helly Hansen acquisition. KTB's Wrangler brand shows robust growth and market share gains, but Lee's revenues are falling, with 2026 expected to be a transition year. Helly Hansen's integration has boosted revenue but delivered minimal profitability, with segment margins at just 1.5% versus Wrangler's 23%.
Kontoor Brands receives a sell rating due to a stretched balance sheet and questionable Helly Hansen acquisition. Core brands Wrangler and Lee show weak organic growth, with Wrangler driving over 80% of segment profits but only 1% sales growth. Helly Hansen's segment margin is below 5%, raising doubts about the acquisition's strategic and financial rationale.
Kontoor Brands offers a compelling value opportunity after an extended post-earnings selloff, despite strong Q3 results, an upgraded 2025 outlook, and an upbeat message from the management. The acquisition of Helly Hansen is part of a long-term strategy. Yet, the business' overall financial underperformance might be real in the short term. Kontoor Brands maintains robust cash flow, a 3.43% dividend yield, and a clear plan, positioning for margin and earnings growth.
Kontoor (KTB) might move higher on growing optimism about its earnings prospects, which is reflected by its upgrade to a Zacks Rank #2 (Buy).