Gildan Activewear (TSX:GIL): Assessing Valuation After New Long-Term Growth Guidance for 2026-2028

Gildan Activewear (TSX:GIL) just gave investors something new to chew on by announcing its long-term outlook for net sales growth. The company now projects compound annual growth of 3% to 5% between 2026 and 2028. This update is likely to get both bulls and skeptics running through their numbers. For a company in the basics business, pinning down future growth is significant and often influences how the market prices in risk, reward, and staying power.

Taking a quick step back, it has been a solid run so far this year for Gildan Activewear. Shares are up 33% in the past year and have gained 14% year-to-date. The past month saw a 7% bump as the market digested both recent results and this latest guidance. Over the past three years, the stock has returned 109%, showing momentum that has outpaced many consumer companies. That kind of track record, combined with a clear guide on future growth, tends to reshape valuation discussions almost overnight.

After this series of gains and a new look into management’s expectations, is Gildan Activewear trading at a bargain or has the market already factored in its growth outlook?

Most Popular Narrative: 14.4% Undervalued

According to community narrative, Gildan Activewear is currently seen as undervalued by 14.4% compared to its fair value estimate. This view reflects expectations of steady financial and competitive performance in the years ahead.

The company's vertically integrated and environmentally efficient manufacturing footprint, combined with U.S. cotton and yarn content, provides a strong competitive advantage. As customers put heightened emphasis on ethical sourcing and as tariffs shift globally, this enables Gildan to protect margins and sustain earnings growth through cost savings and supply chain resilience.

Ready to uncover the math fueling this bullish price target? The most important number here might surprise you. Analysts factor in changes to both profitability and share count, all hinging on a future multiple that is typically reserved for more premium names. Want to know which core assumptions drive this value gap and whether management can actually deliver? Dive deeper to reveal the forecasted financial engine behind today's discount.

Result: Fair Value of $90.03 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, challenges such as ongoing weakness in international markets or underperformance of new product launches could put Gildan’s growth story to the test.

Find out about the key risks to this Gildan Activewear narrative.

Another View: Discounted Cash Flow Perspective

While the community narrative focuses on future growth and competitive advantages, our DCF model offers a different angle. Using projected cash flows, this approach also suggests that Gildan Activewear is currently undervalued. This agreement across methods could signal a rare consensus. However, investors may want to consider if there is more beneath the surface to weigh.

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Gildan Activewear for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Gildan Activewear Narrative

If you think your take on Gildan’s value might be different or just want to crunch the numbers yourself, building your own forecast takes only a few minutes. Why not do it your way?

A great starting point for your Gildan Activewear research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

Looking for More Smart Investment Moves?

Why focus on just one idea when you could expand your universe of choices? Take action now by uncovering exceptional opportunities chosen for strong financials, disruptive innovation, and reliable income. Tap into these trends and position your portfolio ahead of the curve with these handpicked strategies:

• Tap into big tech’s next evolution by searching for companies advancing artificial intelligence. Spot the frontrunners with AI penny stocks.
• Accelerate your returns by finding stocks with income potential. Target firms offering yields above 3% using dividend stocks with yields > 3%.
• Find tomorrow’s game changers early by investigating firms with robust financials under the radar, thanks to penny stocks with strong financials.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com