On Monday, UBS adjusted its outlook on G-III Apparel Group (NASDAQ:GIII), a fashion holding company, by reducing the stock price target to $31 from $34. The firm upheld its neutral stance on the stock. The adjustment follows G-III Apparel's forecast for fiscal year 2025, which suggests a low double-digit percentage decrease in earnings per share (EPS).
This projection points to ongoing challenges in the near term for the company.
The UBS analyst noted that the anticipated phase-out of approximately $1 billion in revenues from PVH (NYSE:PVH) brands contributes to a high level of uncertainty regarding G-III's long-term growth potential. According to the analyst, these factors are likely to hinder significant price-to-earnings (P/E) ratio expansion in the next twelve months.
Despite the reduced price target indicating a reasonable upside, UBS expressed a preference for other investment opportunities within the Softlines sector. The firm's continued neutral rating on G-III Apparel reflects this perspective.
G-III Apparel's updated guidance and the subsequent price target adjustment by UBS highlight the company's current business challenges. The fashion industry, particularly for companies like G-III, faces a complex environment with shifting consumer trends and operational hurdles.
Investors and market watchers will be monitoring G-III Apparel's performance closely, especially in light of the strategic changes and financial forecasts that have influenced UBS's valuation of the company's stock.
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