Personal protective equipment (PPE) provider ANN has rallied strongly from its May low driven by a combination of improving sentiment, confidence in the company’s resilient earnings outlook and ongoing share buybacks. With around 45% of FY25 revenue generated in the US, the business remains well leveraged to its largest market. Pleasingly, the US division performed in line with expectations in 1H26, successfully passing through tariff-related cost increases, despite some softness in tariff-exposed end markets.
The acquisition of Kimberly-Clark’s PPE business is integrating ahead of schedule and continues to make a meaningful earnings contribution. However, with most acquisition and restructuring benefits expected to be realised by the end of FY26, future earnings growth will increasingly depend on organic revenue growth, a key focus for the incoming CEO’s strategic agenda.
The healthcare name is trading around its long-term average valuation after its share price recovery, which has helped the sector surge +18% over the last month to become the top-performing sector, yet another example of broadening investor appetite across the market.
- We like ANN despite its recent strong bounce, targeting a retest of its highs, but from a risk/reward perspective we wouldn’t go “all in here,” leaving flexibility into dips.
MM is bullish towards ANN around $32
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