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Gildan (GIL): Here’s Why UBS Downgraded the Stock

Farooq Sun, November 8, 2026 at 3:29 PM EST 4 min read **

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We just published a list of the 10 High-Profile Stocks Just Dumped by Top Analysts** and Gildan Activewear (NYSE:GIL) ranked 9th on this list.

Wall Street had one of its roughest sessions of the year this week. The Nasdaq Composite fell 5.52% on November 5, its deepest one-day drop in 19 months, Reuters_ reported that day. The index closed more than 10% below its October 6 record, which confirmed a technical correction.

The S&P 500 slid 4.36% and the Dow Jones Industrial Average lost 3.44%, wiping about $3 trillion off the value of S&P 500 companies.

The Philadelphia SE Semiconductor index plunged more than 12%, and trading volume reached 26.9 billion shares, well above the 20-session average of 17.7 billion. Chipmakers and other AI-linked stocks took the brunt of the damage.

_ 5 Best Tech Stocks Under $50 to Buy Now A person with a cell phone who is looking for new stocks

Fears of AI Regulation Hit Chip Stocks Hardest

The trigger was politics. Democrats won control of Congress in Tuesday's elections, including in states where opposition to new data centers has grown. Investors worried that tougher rules could slow the buildout of AI infrastructure, according to the Reuters_ report.

Melissa Brown, global head of investment decision research at SimCorp, said any slowdown would raise concerns because AI growth has leaned on rapid construction of supporting infrastructure. Jed Ellerbroek, a portfolio manager at Argent Capital Management, said, "This feels like the capitulation phase for the data center capex beneficiary stocks," though he thinks the size of the moves is outsized.

The drop followed a strong run. The S&P 500 had posted its biggest one-day gain in three months the day before, and it is still up 7.4% for the year. We recently rounded up ten stocks you are selling and insiders are buying.

A Hot Jobs Report Revives Rate-Hike Bets

Friday's jobs report did little to calm nerves. Employers added 165,000 jobs in October, more than twice what economists expected, and the unemployment rate edged down to 4.1%, Reuters reported on November 6.

Traders raised their bets on a Federal Reserve rate hike in response. Markets priced about a 78% chance of a quarter-point increase at the central bank's December 8-9 meeting, up from about 67% on Thursday, and they now expect a final hike in April rather than June. For a look at the other side of the analyst picture, see our ranking of affordable stocks Wall Street analysts like.

Cleveland Fed President Beth Hammack and Richmond Fed chief Thomas Barkin had already hinted at possible future rate hikes, Reuters reported on November 5. Fed Chairman Kevin Warsh said last month that policymakers would watch the accumulation of data to decide whether more tightening is needed. Fitch Ratings analyst Olu Sonola said "the economy remains on firm footing" despite recent AI-related concerns, while Raymond James analysts wrote that they expect the Fed to raise rates by 25 basis points in December.

** Story Continues Gildan has a market cap of $6.44 billion and an average upside potential of 35% based on analysts' average price target, and had 32 hedge fund holders in Q2 2026.

UBS analyst Jay Sole cut Gildan to Neutral from Buy on November 6 and lowered his price target to $38 from $71. The downgrade followed a weak third-quarter report and a significant cut to fiscal 2026 EPS guidance. Sole said a tougher macroeconomic environment is hurting the business more than previously expected. UBS expects some top-line headwinds to persist into next year, sees added downside risk to Wall Street's fiscal 2027 EPS estimates, and sees no positive catalysts until the company's analyst day in spring 2027. It now sees balanced upside and downside for the shares.

Gildan's quarter backs up the cut. Revenue of $1.47 billion came in below the company's guidance of about $1.65 billion, and the 2026 adjusted EPS outlook fell to a range of $3.70 to $3.80 from $4.65 to $4.75. Management pointed to weaker-than-expected demand, an unfavorable product mix, lower selling prices and product availability constraints. Chief executive Glenn Chamandy described "a more subdued demand environment" in both Wholesale and Retail.

Revenue was still up 61.1% from a year earlier because of the HanesBrands acquisition, which we examined in our look at whether Gildan is a bargain or a broken deal**.

While we acknowledge the risk and potential of GIL as an investment, we believe certain AI infrastructure stocks offer far stronger long-term potential at a much more attractive entry point. If you are looking for an AI stock more promising than GIL that operates as a critical AI tollbooth and stands as the most important company in the world, check out our report about this must-own AI stock.

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