Kontoor Brands' (KTB) two core brands have significant long-term potential across categories, channels and geographies, and the company could transition from a cash flow stock to a growth stock after the planned sale of its Lee business, UBS Securities said.

The investment firm said in a note Monday it remains bullish on Helly Hansen's outlook following a US-focused analysis and believes the brand could lift Kontoor's long-term sales growth to the mid-single-digit percentage range from low-single-digit.

UBS pointed to a runway for Helly Hansen to expand gradually across key wholesale accounts including Dick's Sporting Goods, REI, and Scheels following an initial test at House of Sport, alongside accelerating direct-to-consumer growth from higher marketing investment and an improved product pipeline.

The brokerage forecasts Helly Hansen's revenue will reach more than $1 billion by fiscal 2030, driven in part by its US business more than doubling to about $330 million from roughly $150 million in fiscal 2025.

UBS maintained its buy rating, with a price target of $131.

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