Why G-III Apparel Group (GIII) Is Back In The Spotlight
Coty’s long term extension of the Marc Jacobs license with WHP Global and G-III Apparel Group (GIII) puts the Marc Jacobs brand partnership back in focus for investors watching GIII’s exposure to prestige beauty.
G-III Apparel Group’s latest share price of US$31.80 comes after a strong 30-day share price return of 15.64%, even though the 90-day move is down 6.19%. That pattern, coupled with a 1-year total shareholder return of 15.35% and a modest 5-year total shareholder return of 0.84%, suggests momentum has picked up recently after a flatter longer run as investors reassess the value of G-III’s exposure to brands like Marc Jacobs in prestige beauty.
Scan beyond G-III Apparel Group and see how other fashion and consumer names are pricing in similar momentum around brand partnerships with the 20 high quality undiscovered gems.
G-III Apparel Group now has a powerful brand portfolio, a fresh Marc Jacobs catalyst and a US$31.80 share price reflecting that story. Are investors paying a fair price for this business or stretching for momentum?
Most Popular Narrative: 8% Undervalued
Against G-III Apparel Group’s last close of $31.80, the analyst consensus Narrative on Simply Wall St places fair value at $34.75. This suggests the market price sits below that narrative estimate while investors weigh license losses against owned brand growth.
Ongoing replacement of Calvin Klein and Tommy Hilfiger licenses with higher margin owned brands such as DKNY, Donna Karan, Karl Lagerfeld and Marc Jacobs, with roughly US$700 million of the anticipated US$1.2b revenue loss already offset, could continue to support revenue and gross margin mix.
See why 3 investors see G-III Apparel Group as 8% undervalued.
The same Narrative expects G-III Apparel Group to face declining revenue and earnings over the next few years, yet still arrives at that $34.75 fair value using a 9.33% discount rate. This implies investors need to judge whether the owned brand mix shift and Marc Jacobs exposure adequately compensate for those forecast headwinds.
Result: Fair Value of $34.75 (UNDERVALUED)
Still, the loss of Calvin Klein and Tommy Hilfiger revenue, along with any slowdown in scaling Marc Jacobs, could quickly challenge the current G-III Apparel Group narrative.
Find out about the key risks to this G-III Apparel Group narrative.
Another View: SWS DCF Signals Caution On G-III Apparel Group
The analyst Narrative views G-III Apparel Group as undervalued around $31.80 compared to a $34.75 fair value. The SWS DCF model tells a different story. On that cash flow view, estimated value sits at $24.14, so the current price screens as overvalued rather than cheap. This raises a key question: which lens do you consider more informative, earnings multiples or cash flow estimates?
For readers who want to see how that cash flow approach is built line by line, 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 G-III Apparel Group 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 32 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.
Next Steps
If the crosscurrents around G-III Apparel Group feel mixed, that is the point, and it is exactly why investors are split on the story. Act while sentiment is still forming and weigh both sides of the ledger for yourself with the 1 key reward and 2 important warning signs.
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