03:35 PM EDT, 06/06/2024 (MT Newswires) -- Hanesbrands' ( HBI ) sale of its Champion business for as much as $1.5 billion is positive for the stock amid prospects for a lower leverage ratio and higher margins, UBS Securities said in a report emailed Thursday.

The asset sale also will reduce interest expenses and simplify the business with a narrower focus on innerwear and supply chain, UBS said. Authentic Brands Group bought for the Champion business for $1.2 billion and an additional payment of up to up to $300 million if certain performance thresholds, Hanesbrands ( HBI ) said Wednesday.

UBS said it is more bullish on Hanesbrands ( HBI ), though revenue and EBITDA are expected to fall. Interest expenses may decline by $75 million on an annualized basis, the report said.

UBS has a neutral rating on Hanesbrands ( HBI ) and a $5 price target.

Shares of Hanesbrands ( HBI ) fell 2.7% in recent trading Thursday.

Price: 5.15, Change: -0.15, Percent Change: -2.74