Delta Galil Industries

(Nasdaq:DELT) which manufactures and markets undergarments in Europe and the United States is looking to increase its market share in the U.S. undergarment sector, and is transferring its manufacturing operations to countries with lower labor costs. That's according to Bank Mizrachi analyst, Shai Ben-Amar

Ben-Amar gives the stock, which trades on the TASE and Nasdaq, a Buy recommendation. He sets a price target of NIS 66 for the share, which is 30% higher than its current market price.

The analyst says that Delta has a sound strategy, which should enable it to harness its design and product development talents. But Ben-Amar estimates that in the short term, economic conditions are not favorable to the company, and says Delta will be unlikely to fend off the effects of a slowdown in its sector of the market.

Ben-Amar said that although Delta is vulnerable to the slowdown in the U.S. economy, recent interest rates cuts would only boost consumer demand for is products by the second quarter.

Ben-Amar estimates that Delta's sales will amount to $627 million, and that the company's earnings will reach $27 million. The analyst bases his valuation of the stock on a price earnings ratio of 13, for his 2001 earnings estimates.