Carter's (NYSE:CRI) Raised to Buy at Wall Street Zen

Key Points

• Wall Street Zen upgraded Carter’s to “Buy” from “Hold,” although the broader analyst consensus remains “Hold” with a $41.17 price target.
• Carter’s reported a strong quarter, with earnings of $0.26 per share and revenue of $615.5 million, surpassing estimates; revenue rose 5.2% year over year.
• Despite the earnings beat, third-quarter revenue guidance of approximately $750 million came in below the $797 million consensus estimate, raising concerns about near-term sales momentum.

Carter's (NYSE:CRI - Get Free Report) was upgraded by stock analysts at Wall Street Zen from a "hold" rating to a "buy" rating in a research note issued to investors on Sunday.

Other research analysts also recently issued reports about the company. UBS Group reaffirmed a "buy" rating on shares of Carter's in a research note on Wednesday, July 8th. Zacks Research cut shares of Carter's from a "strong-buy" rating to a "hold" rating in a research note on Monday, May 25th. Wells Fargo & Company raised shares of Carter's from an "underweight" rating to an "equal weight" rating and boosted their price target for the stock from $30.00 to $42.00 in a report on Wednesday, June 17th. Citigroup restated a "buy" rating on shares of Carter's in a research report on Tuesday, July 21st. Finally, Weiss Ratings downgraded shares of Carter's from a "hold (c-)" rating to a "sell (d+)" rating in a report on Monday, May 4th. Four investment analysts have rated the stock with a Buy rating, three have issued a Hold rating and two have assigned a Sell rating to the company's stock. According to MarketBeat, Carter's has a consensus rating of "Hold" and a consensus price target of $41.17.

Carter's Trading Up 2.3%

Shares of NYSE:CRI opened at $38.65 on Friday. The company has a market cap of $1.42 billion, a P/E ratio of 7.24 and a beta of 0.86. Carter's has a 1 year low of $23.38 and a 1 year high of $44.44. The stock's fifty day moving average price is $39.85 and its 200-day moving average price is $37.62. The company has a debt-to-equity ratio of 0.61, a current ratio of 2.80 and a quick ratio of 1.72.

Carter's (NYSE:CRI - Get Free Report) last issued its earnings results on Friday, July 31st. The textile maker reported $0.26 EPS for the quarter, topping analysts' consensus estimates of $0.06 by $0.20. Carter's had a return on equity of 13.06% and a net margin of 3.07%.The firm had revenue of $615.49 million for the quarter, compared to the consensus estimate of $605.68 million. During the same quarter in the prior year, the business earned $0.17 earnings per share. The company's revenue was up 5.2% compared to the same quarter last year. Sell-side analysts expect that Carter's will post 3.09 earnings per share for the current year.

Institutional Investors Weigh In On Carter's

A number of hedge funds have recently added to or reduced their stakes in the business. AQR Capital Management LLC increased its stake in Carter's by 113.7% in the second quarter. AQR Capital Management LLC now owns 2,564,457 shares of the textile maker's stock valued at $77,267,000 after purchasing an additional 1,364,698 shares during the period. Dimensional Fund Advisors LP increased its holdings in shares of Carter's by 36.6% in the first quarter. Dimensional Fund Advisors LP now owns 1,765,205 shares of the textile maker's stock valued at $63,121,000 after purchasing an additional 472,786 shares during the period. Morgan Stanley raised its stake in shares of Carter's by 15.7% during the fourth quarter. Morgan Stanley now owns 1,762,036 shares of the textile maker's stock worth $57,143,000 after purchasing an additional 239,469 shares during the last quarter. Charles Schwab Investment Management Inc. raised its stake in shares of Carter's by 5.4% during the fourth quarter. Charles Schwab Investment Management Inc. now owns 1,597,901 shares of the textile maker's stock worth $51,820,000 after purchasing an additional 82,498 shares during the last quarter. Finally, UBS Group AG lifted its holdings in shares of Carter's by 29.6% during the fourth quarter. UBS Group AG now owns 1,349,777 shares of the textile maker's stock worth $43,773,000 after purchasing an additional 308,347 shares during the period.

Carter's News Roundup

Here are the key news stories impacting Carter's this week:

• Positive Sentiment: Carter’s reported second-quarter adjusted earnings of $0.26 per share, substantially above analyst estimates of approximately $0.02–$0.06 and up from $0.17 a year earlier. Carter's Beats Q2 Earnings and Revenue Estimates
• Positive Sentiment: Revenue increased 5.2% year over year to $615.5 million, exceeding the roughly $605.7 million consensus estimate. Management also said adjusted operating profit rose 54% and that results exceeded its prior outlook. Carter's Reports Second Quarter Fiscal 2026 Results
• Neutral Sentiment: Full-year 2026 revenue guidance was maintained or updated at approximately $3.0 billion, broadly in line with consensus. The available guidance report did not provide a comparable full-year EPS figure. Carter's Q2 2026 Earnings Call Transcript
• Negative Sentiment: Third-quarter revenue guidance of approximately $750 million fell well below the analyst consensus of $797 million. The shortfall creates concern about near-term sales momentum despite the strong second-quarter performance. Carter's Q2 Sales and Guidance

About Carter's

Carter's, Inc NYSE: CRI is a leading designer and marketer of infant and young children's apparel in North America. Headquartered in Atlanta, Georgia, the company's core business focuses on creating clothing and accessories for babies and children, including bodysuits, sleepwear, layette, outerwear and accessories that blend comfort, safety and style. Carter's flagship brand is complemented by its OshKosh B'gosh line, which offers heritage-inspired designs and durable fabrics for toddlers and young kids.

The company distributes its products through a diversified platform that includes wholesale partnerships with major department stores and mass merchandisers, direct‐to‐consumer e-commerce sites, and an extensive network of company-operated retail stores.

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