KONTOOR BRANDS, INC. (KTB): what the price assumes
In the published model solve dated 2026-Q2, anchored at $85.64, KONTOOR BRANDS, INC. (KTB) is priced for +16.8% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-27.
Generated: 2026-07-29 · Exported: 2026-08-01 · Source: https://boothcheck.com/report/KTB
Headline
| Field | Value |
|---|---|
| Ticker | KTB |
| Company | KONTOOR BRANDS, INC. |
| Current price | $85.64/sh |
| Composition | Wrangler 61% / Lee 24% / Helly Hansen 15% / Other 1% |
What The Price Assumes (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Implied growth | 16.8% |
| Multiple paid | 19x operating income |
Solve inputs: computed at a 9.5% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~6.8pp.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | +0.57σ |
| cohort percentile (of 212 peers) | 59 |
| sustained it ~5 years at this level | 42% |
| implied end-window share | 0% |
Valuation X-Ray
The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.60x | 5 | expensive |
| Earnings | 1.60x | 5 | expensive |
| Relative | 0.76x | 5 | justifies |
| Growth | 0.53x | 3 | justifies |
Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.5%); the inversion above states its own rate.
Per-Model Detail (n=18)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $454.82 | 0.19x | yes | FCF base $0.5B, growth 25% (input: historical growth), terminal g 4.0%, WACC 7.5%, 7yr projection |
| DCF Exit Multiple | Growth | $161.99 | 0.53x | yes | Exit EV/EBITDA: 13.4x / 16.4x / 19.4x (bear / base = today's held flat / bull), 7yr |
| Relative Valuation | Relative | $100.26 | 0.85x | yes | P/E 22x (static sector reference · 2026-04), scenarios: 17.6x / 22.0x / 26.4x (bear / base = reference held flat / bull), EV/EBITDA 14x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $53.48 | 1.60x | yes | BV/sh $11.05, ROE (TTM) 44.8%, ke 9.3% |
| Two-Stage Excess Return | Asset | $136.43 | 0.63x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $124.26 | 0.69x | yes | Rev $3.1B, growth 30% (input: historical growth; tapered), Terminal P/S: 1.2x / 1.5x / 1.8x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $159.18 | 0.54x | yes | EPS $4.94, growth 32% (input: historical EPS growth), PEG=0.54 (Undervalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $36.11 | 2.37x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.32B × (1−24%) / WACC 7.5% → EPV (no growth) |
| Residual Income | Asset | $85.67 | 1.00x | yes | BV $11.05 + 5yr PV of (ROE (TTM) 44.8% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $35.05 | 2.44x | yes | √(22.5 × EPS $4.94 × BVPS $11.05) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $69.84 | 1.23x | yes | EBITDA $0.37B × sector EV/EBITDA 14.0x |
| FCF Yield | Earnings | $55.17 | 1.55x | yes | FCF $399.8M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $49.17 | 1.74x | yes | SBC-adj FCF $0.37B (FCF $0.40B − SBC $0.03B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $159.40 | 0.54x | yes | EPS $4.94 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $5.43 | 15.77x | yes | BV $11.05 × (ROIC 3.7% / WACC 7.5%) |
| P/Sales Sector | Relative | $112.25 | 0.76x | yes | Revenue $3.14B × sector P/S 2.0x |
| PEG Fair Value | Relative | $185.25 | 0.46x | yes | EPS $4.94 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $53.41 | 1.60x | yes | EPS $4.94 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $1.1b |
| Net debt / NOPAT (after-tax) | 5.45x |
| Net debt / operating income (pre-tax) | 4.12x |
| Share count CAGR (buyback) | -0.8% |
| Burning cash | no |
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
- Kontoor owns Wrangler and Lee, two of the most recognized denim brands in the world, and recently added the premium outdoor brand Helly Hansen, shifting the mix from pure jeans toward a broader apparel portfolio.
- The price is reasonable rather than stretched: at roughly 18 times operating income it embeds about 15% annual operating-profit growth for five years, a pace the company has recently delivered and that fewer than half of comparable fast-growers have sustained over five years.
- Watch the Lee divestiture and the Helly Hansen ramp: Kontoor has put Lee up for sale and authorized a $750 million buyback, so the next two catalysts reshape both the portfolio and the share count.
Bull Case
The price sits below where most of the valuation methods land, which is unusual for a company growing this fast, and that gap is the bull case. At roughly 18 times operating income the stock is reachable by the relative-multiple and growth-oriented methods, while the implied growth the price requires, about 15% a year for five years, is within what Kontoor has recently delivered. The 10-K describes a company pursuing strategies to "support and grow market share in existing distribution with leading retailers, drive business opportunities in new channels, such as premium, specialty and sporting goods", and the most recent results show that strategy working: Wrangler posted its sixteenth consecutive quarter of share gains in men's and women's bottoms, gaining over 100 basis points in the quarter. A brand taking share for four straight years is not a tired denim label; it is a winning one.
The Helly Hansen acquisition reshapes the growth profile, and it is contributing already. The premium outdoor brand added $176 million of revenue in the quarter, up 16% on a reported basis, and contributed to a 45% jump in continuing-operations revenue to $613.3 million. Helly Hansen carries higher growth and a more premium positioning than core denim, which lifts the blended growth rate and gives Kontoor a second engine in technical outerwear, a category with structural tailwinds and pricing power that mass-market jeans lack. Management is steering meaningful investment behind the brand, and the early double-digit growth is the evidence the integration is taking.
The margin and capital-allocation story rounds out the case. Gross margin expanded 810 basis points to 53.7% in the quarter, helped by cost-of-goods reductions and a tariff receivable, and the company raised full-year 2026 adjusted earnings guidance. The balance sheet supports the plan: net debt near $1.09 billion is under three times operating income with interest coverage near 5.8 times, comfortable cover for a consumer-brand business. Kontoor authorized a $750 million share repurchase program, expected to be funded partly by proceeds from the planned Lee sale, which simplifies the portfolio while shrinking the share count. Against apparel peers like Ralph Lauren, PVH, and the former parent VF Corporation, Kontoor pairs faster brand-share momentum with a cleaner balance sheet and a more focused brand set after the Lee divestiture, which is the combination the bull case rests on.
Bear Case
The competitive pressure that matters most for Kontoor is the channel it depends on: mass-market and wholesale denim, where the retailer holds the power and the consumer is price-sensitive. The 10-K is candid that its wholesale customers have "experienced significant business disruptions" in past downturns and that there can be "no assurance that our wholesale or other customers have adequate financial resources" to withstand stress. Wrangler's share gains are real, but they come in a category, basic bottoms, where the brands compete on price and shelf space against private label and against rivals like the former parent VF Corporation and PVH. A single large retailer pulling back orders or pushing its own private-label denim can dent a quarter, and the customer concentration that comes with selling through a handful of big-box chains is a structural fragility no brand strength fully offsets.
The quality of the quarter's headline numbers deserves scrutiny, because the bear's point is that some of the strength is one-time. The 810-basis-point gross-margin expansion was driven substantially by a tariff receivable and prior-year tariff cost reductions, not purely by underlying pricing or mix. Tariff dynamics cut both ways: the same trade policy that produced a receivable this quarter is a live cost risk in future quarters, and the 10-K names "fluctuating foreign currency exchange rates, supply chain issues and inconsistent consumer demand" as persistent headwinds. A margin lifted by a tariff timing benefit is not the same as a margin lifted by durable structural improvement, and extrapolating it overstates the run-rate.
The portfolio reshaping carries execution risk on both ends. Integrating Helly Hansen, a premium outdoor brand with a different customer, different seasonality, and a different distribution model than mass denim, is not the company's core competency, and the heaviest ambitions for the brand are years out rather than now. Simultaneously, divesting Lee removes about $195 million of revenue and a known cash generator, and the proceeds and timing are not yet certain. Doing a large acquisition integration and a divestiture at the same time, while funding a $750 million buyback partly on sale proceeds that have not closed, stacks several execution bets on top of each other. The price already embeds about 15% annual growth for five years, and if any one of those moves, the Helly Hansen ramp, the Lee sale, or the tariff-aided margin, disappoints, the growth assumption the price rests on becomes harder to meet.
Valuation
The price is making a reasonable growth bet rather than an aggressive one. At today's level the market pays roughly 18 times Kontoor's operating income, which inverts to about 15% annual operating-profit growth held for five years. That is a real growth assumption, but a defensible one: it is within what the company has recently delivered, and the relevant base rate is moderate, with about 44% of comparable fast-growers sustaining that pace over five years. The bet is that brand-share momentum and the Helly Hansen contribution keep the growth going, not that something unprecedented happens.
The method families land in a constructive pattern. The relative-multiple lens and the growth-oriented cash-flow lens both reach or support the price, while the asset-value and earnings-power lenses sit somewhat below it. That means the price is not stretched against peer multiples or against a forward-growth view; it is only rich against the most conservative static frames, which is the normal posture of a healthy brand company that the market credits with continued share gains. There is no extreme premium here of the kind a story stock carries; the spread between the methods is modest, which marks Kontoor as fairly priced for its growth rather than as a bet beyond what any frame supports.
Solvency is sound and supports the capital plan. Net debt near $1.09 billion is under three times operating income, with interest coverage near 5.8 times, comfortable for a consumer-brand business, and the share count has been roughly flat to slightly declining. The valuation rests on the growth assumption holding, and the $750 million buyback, funded partly by the planned Lee sale, adds a per-share tailwind on top. Against apparel peers Ralph Lauren and PVH, Kontoor trades at a comparable-to-lower multiple while growing faster after the Helly Hansen addition, and the analyst mean target near $92 sits well above today's price. The street, crediting the brand momentum and the portfolio reshaping, lands above where the conservative methods reach; the reconciliation is whether the 15% growth and the integration both deliver, which is the same question the inversion frames.
Catalysts
The first-quarter 2026 print, reported in early May, drove a strong reaction and raised the full-year bar. Continuing-operations revenue rose 45% to $613.3 million, lifted by Helly Hansen, with Wrangler global revenue up 2% on its sixteenth consecutive quarter of share gains and Helly Hansen contributing $176 million, up 16% reported. Gross margin expanded 810 basis points to 53.7%, and management raised full-year 2026 adjusted EPS guidance to a range of $6.60 to $6.70 with revenue guidance of about $3.44 billion.
The portfolio moves are the defining catalysts. Kontoor announced a decision to divest the Lee brand, with the process initiated in the quarter, multiple interested parties, and an agreement expected later this year, which would refocus the company on Wrangler and Helly Hansen. Alongside it, the board authorized a $750 million share repurchase program expected to be funded in part by Lee sale proceeds. The timing and price of the Lee sale, and the pace of the buyback, are the swing factors for the next few quarters.
The sell side has turned decidedly positive. The consensus rating sits at Buy with a mean price target near $92, well above today's price, and several firms raised targets after the quarter: Barclays to $96, Goldman Sachs to $95, and Wells Fargo to $100, with JPMorgan adding the stock to its focus list at a $90 target. Much of the optimism leans on Helly Hansen delivering double-digit growth into 2027, so the brand's ramp is the catalyst the elevated targets are underwriting.
Peer Cohorts (Per Segment, With Filing Citations)
Wrangler / Lee (reported)
- LEVI (LEVI STRAUSS & CO)
- FY2025 10-K: GroupHeldForSaleOrDisposedOfBySaleNotDiscontinuedOperationsMember lvis:DockersMember 2025-07-31 2025-07-31 0000094845 us-gaap:DisposalGroupHeldForSaleOrDisposedOfBySaleNotDiscontinuedOperationsMember lvis:DockersMember 2024-12-02 2025-11-30 0000094845…
- FY2025 10-K: …to sell our Dockers ® business. On July 31, 2025 the Company sold the Dockers ® intellectual property and operations in the U.S. and Canada. The sale of the remaining Dockers ® operations is expected to close in the first quarter of 2026 and be completed on or around February 27, 2026. We operate our business…
- VFC (V. F. CORPORATION)
- FY2025 10-K: …sport activities, such as high altitude mountaineering, skiing, snowboarding, and ice climbing. Products are also designed for year-round trail and rock climbing activities. The North Face ® products are marketed globally, primarily through specialty outdoor and premium sporting goods stores, department stores,…
- FY2025 10-K: 25 Form 10-K 1 Table of Conten ts The following table summarizes VF's brands by reportable segment: REPORTABLE SEGMENT BRANDS PRIMARY PRODUCTS Outdoor The North Face ® Performance and performance-inspired outdoor apparel, footwear, equipment, accessories Timberland ® Style-forward and weather-ready footwear, apparel,…
- PVH (PVH Corp.)
- FY2025 10-K: …Arranger and Joint Lead Bookrunner, Royal Bank of Canada as Documentation Agent, MUFG Securities Americas Inc. as Documentation Agent, US Bancorp as Documentation Agent, Wells Fargo Securities, LLC as Documentation Agent and RBC Capital Markets, LLC as Joint Lead Arranger and Joint Lead Bookrunner (incorporated by…
- FY2025 10-K: …pvh:HeritageBrandsWholesaleMember 2023-01-30 2024-02-04 0000078239 us-gaap:RoyaltyMember pvh:TommyHilfigerNorthAmericaMember 2023-01-30 2024-02-04 0000078239 us-gaap:RoyaltyMember pvh:TommyHilfigerInternationalMember 2023-01-30 2024-02-04 0000078239 us-gaap:RoyaltyMember pvh:CalvinKleinNorthAmericaMember 2023-01-30…
- RL (RALPH LAUREN CORPORATION)
- FY2025 10-K: …engagement, life skills programs and empowerment opportunities for factory workers. Our most recently published Global Citizenship & Sustainability Report covering Fiscal 2024 may be found on our corporate website at https://corporate.ralphlauren.com/citizenship-and-sustainability. Our Global Citizenship &…
- FY2025 10-K: …us-gaap:TransferredOverTimeMember 2023-04-02 2024-03-30 0001037038 us-gaap:LicensingAgreementsMember rl:AsiaSegmentMember us-gaap:TransferredOverTimeMember 2023-04-02 2024-03-30 0001037038 us-gaap:LicensingAgreementsMember rl:OtherNonReportableSegmentRelatedMember us-gaap:TransferredOverTimeMember 2023-04-02…
- GIII (G III APPAREL GROUP LTD /DE/)
- FY2025 10-K: …of a retail customer of ours could result in reduced business with that customer. We may also assume higher credit risk relating to receivables of a retail customer experiencing financial difficulty that could result in higher reserves for doubtful accounts or increased write-offs of accounts receivable. We attempt…
- FY2025 10-K: …for retailers. We are constantly monitoring the market and seeking brands with strong consumer recognition and the ability to drive profitable sales by leveraging our platform and established infrastructure. In fiscal 2025, we brought to market three new licensed brands, including Nautica Jeans, which launched in…
- COLM (COLUMBIA SPORTSWEAR COMPANY)
- FY2025 10-K: …In addition, we earn revenue through licensing certain of our trademarks across a range of apparel, accessories, equipment, and home products. U.S. U.S. is our largest segment and provides apparel, accessories and equipment products through our Columbia, Mountain Hardwear and prAna brands and footwear products…
- FY2025 10-K: …patterns. Our products are marketed on a seasonal basis, and our sales are weighted substantially toward the third and fourth quarters, while our operating costs are more equally distributed throughout the year. ACCELERATE Growth Strategy In 2024, we announced the Columbia brand (the "Brand") ACCELERATE Growth…
Helly Hansen (reported)
- COLM (COLUMBIA SPORTSWEAR COMPANY)
- FY2025 10-K: …for our products, identify our company and differentiate our products from competitors' products. We own many trademarks, including Columbia Sportswear Company®, Columbia®, SOREL®, Mountain Hardwear®, prAna®, the Columbia diamond shaped logo, the Mountain Hardwear nut logo, the SOREL polar bear logo, and the prAna…
- FY2025 10-K: …public relations efforts. In addition, we reinforce our brands' marketing messages with our key wholesale customers by utilizing digital platforms, television, print and advertising campaigns, as well as in-store branded visual merchandising display tools and favorable product presentation. We also authorize and…
- VFC (V. F. CORPORATION)
- FY2025 10-K: …sport activities, such as high altitude mountaineering, skiing, snowboarding, and ice climbing. Products are also designed for year-round trail and rock climbing activities. The North Face ® products are marketed globally, primarily through specialty outdoor and premium sporting goods stores, department stores,…
- FY2025 10-K: …partners and online at www.smartwool.com. The Icebreaker ® brand specializes in performance apparel and accessories based on natural fibers, including merino wool and plant-based fibers. Icebreaker ® products ar e sold globally primarily through specialty outdoor and premium sporting goods stores, concession retail…
- DECK (DECKERS OUTDOOR CORP)
- FY2025 10-K: …into new categories. • Thoughtful expansion of our apparel and accessories businesses. HOKA Brand . The HOKA brand is an authentic premium line of year-round performance footwear, which offers enhanced cushioning and inherent stability with minimal weight. Originally designed for ultra-runners, the brand now appeals…
- FY2025 10-K: …consisting of the Teva brand, AHNU brand, and Koolaburra brand) (collectively, the Company's reportable operating segments). The various brands within Other brands are aggregated within one reportable operating segment as each brand shares similar economic and qualitative characteristics. Refer to Note 12,…
- ONON (On Holding AG)
- FY2025 20-F: …Company. Dennis holds a B.A. in government from Dartmouth College and an M.B.A. from Harvard University. Laura Miele became a member of the Board of Directors and the Audit Committee in May 2024, following her tenure as a board consultant (August 2023-April 2024). Laura brings extensive expertise in managing complex…
- FY2025 20-F: …Executive Officer of H&M Group, a global fashion and design company, from January 2020 to January 2024. Her leadership path at H&M was defined by operational rigor and environmental advocacy; she served as Chief Operating Officer (2018-2020), Global Head of Production (2015-2018), and Head of Sustainability…
- WWW (WOLVERINE WORLD WIDE, INC.)
- FY2025 10-K: …from Wolverine ® , $5.2 million from Cat ® , $4.3 million from HYTEST ® , $3.5 million from Harley-Davidson ® , and $2.7 million from Bates ® . The decrease in Other revenue was primarily driven by decreases of $4.6 million from Sperry ® , $3.3 million from joint venture and royalty revenue recorded at the corporate…
- FY2025 10-K: …See Note 16 to the Company's Consolidated Financial Statements for further discussion of environmental remediation costs. INTEREST, OTHER AND TAXES Net interest expense was $32.8 million in 2025 compared to $42.7 million in 2024. Interest expense decreased in the current year due to lower average principal balances…
- UAA (UNDER ARMOUR, INC.)
- FY2025 10-K: …higher demand for or earn higher margins from our competitors' products or their own private label offerings, they may favor the display and sale of those products. We believe we compete successfully because of our brand image and recognition, the performance and quality of our products and our selective distribution…
- FY2025 10-K: 27 Table of Contents and worn by athletes at all levels, from youth to professional, on playing fields around the globe and by consumers with active lifestyles. We remain focused on driving premium brand-right growth and delivering improved profitability. We plan to continue to grow our business over the long term…
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
Kontoor Q1 2026 results, May 2026 · Barclays, Goldman Sachs, and Wells Fargo analyst targets, 2026 · Kontoor 2026 guidance, May 2026 · Barclays, Goldman Sachs, Wells Fargo, and JPMorgan analyst notes, 2026