Bank Hapoalim today reiterated a Buy rating for textiles and clothing company Delta Galil Industries (Nasdaq:DELT) and set a price target of NIS 53, almost 50% above Delta's trading price.

The company's first quarter mirrors events in its recessionary market, writes analyst Oz Levi. The year 2002 has been characterized by substantial regression in sales of luxury goods in the United States, rallying sales to British chain Marks & Spencer's, and stability in American mass-market sales.

Sales to Marks & Sparks grew by 8% in terms of the British pound. That trend may continue in the quarters to come, Levi writes. But transport costs also bounded by a million dollars in the first quarter.

The first quarter is not indicative of the substantial improvement Delta may expect in the second half of 2002, Levi predicts. For one thing, during the first quarter Delta cut off relations with one of its suppliers, which involved a $2 million charge. Closing a 700-man plant in the Dominican Republic cost it another charge, of $400,000. Both moves should engender substantial savings, boosting profits.

He expects Delta to continue narrowing its costly production in Israel and shifting its operations to eastern Europe, where it might carry out sewing using Israeli-made cloth.