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    What Is Drawing Fresh Attention To Gildan Activewear (TSX:GIL)?

    Simply Wall St·11/04/2026 05:29:13
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    A fresh class action lawsuit and an earlier investigative report have pushed Gildan Activewear (TSX:GIL) into the spotlight, after allegations of channel stuffing and revenue pull forwards coincided with a sharp share price drop.

    Gildan Activewear has already had a rough year in the market, with the share price down about 34% year to date and roughly 30% over the past three months, even though the 3 year total shareholder return is still positive at about 31% and the 5 year total shareholder return sits near 20%.

    Stress test your thesis on Gildan Activewear by comparing it with other hand picked apparel and consumer stocks that screen well on quality and value in our 4 high quality undervalued stocks

    Bulls see a bruised but resilient Gildan Activewear, while bears see a value trap built on contested accounting. As you weigh this sharp drawdown, which story does the current valuation actually support?

    Most Popular Narrative: 58% Undervalued

    The most followed narrative on Gildan Activewear pegs fair value near CA$136 per share, which sits well above the last close at CA$56.80, and frames the recent sell off as a valuation gap rather than a permanent reset.

    The planned sale of HanesBrands Australia for about US$490 million, layered on top of guidance for roughly US$1b in 2026 free cash flow, gives Gildan scope to move leverage more quickly toward its 1.5 to 2.5x target range. This could in turn reopen share repurchases and alter the mix between per share earnings growth and absolute earnings growth.

    See why 2 investors see Gildan Activewear as 58% undervalued.

    The narrative uses a discount rate of 9.2% and arrives at a fair value estimate of CA$136.13, which implies a large gap to the current CA$56.80 share price. That gap rests heavily on the assumption that integration benefits, tariff refunds and balance sheet moves translate into stronger earnings power than recent results, despite today’s low 4.4% net margin and 6.2% return on equity.

    Result: Fair Value of CA$136.13 (UNDERVALUED)

    Still, that upside story for Gildan Activewear collides with unresolved short seller accounting allegations and the Texas probe into potential toxic chemicals in children’s undergarments.

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

    Another View On Gildan Activewear’s Valuation

    The earlier narrative leans heavily on future cash flows and a fair value near CA$136. Yet on simple P/E, Gildan Activewear trades around 36.3x, which is higher than both the North American Luxury group at 16x and direct peers at 31.4x, even though the fair ratio sits at 42.1x. Is that a genuine opportunity or just a thinner margin for error if the story slips?

    Before leaning on earnings multiples alone, it helps to see what the numbers imply about where this price could move if sentiment or results change. You can explore this further through our valuation breakdown in the See what the numbers say about this price — find out in our valuation breakdown.

    That comparison becomes clearer when you see how Gildan Activewear’s current P/E stacks up visually against both industry averages and the fair ratio in the

    TSX:GIL P/E Ratio as at Nov 2026
    TSX:GIL P/E Ratio as at Nov 2026

    Next Steps

    If the split views on Gildan Activewear leave you torn, use that unease as a prompt to dig into the data yourself and move quickly while sentiment is still resetting. Start by weighing the 2 key rewards and 6 important warning signs

    Looking for more investment ideas beyond Gildan Activewear?

    Do not get stuck on one ticker. Broaden your watchlist with fresh ideas that match your risk tolerance and income goals while this Gildan Activewear story plays out.