Hanesbrands, Inc. (HBI)

Hanesbrands, Inc. (<a href=http://www.zacks.com/stock/quote/hbi>HBI</a>) management&#39;s business model requires only modest sales growth to create substantial EPS growth. Earnings are being driven by brand-building and cost-reduction initiatives. <p> Since the spin-off in September 2006, the company has reduced debt by $511 million, lowering interest expense from the post spin-off financial structure. However, management is reporting non-GAAP EPS, which excludes unusual actions, which may be distorting perceived earnings. <p> The Buy rating is maintained due to valuation. Currently, our six-month target price is $20.50 per share.

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