Carter's (NYSE:CRI) Shares Gap Down After Analyst Downgrade

Key Points

• Carter’s shares fell after Wells Fargo cut its price target from $42 to $30 while maintaining an equal-weight rating. The stock opened at $30.90, down from its prior close of $32.36.
• Despite the downgrade, analyst sentiment remains generally positive: Carter’s has a consensus “Moderate Buy” rating and an average price target of $39.38.
• The company reported quarterly earnings of $0.26 per share, well above the $0.06 estimate, while revenue rose 5.2% year over year to $615.49 million. Carter’s also paid a quarterly dividend of $0.25 per share, equivalent to a 3.2% yield.

Carter's, Inc. (NYSE:CRI - Get Free Report) gapped down prior to trading on Monday after Wells Fargo & Company lowered their price target on the stock from $42.00 to $30.00. The stock had previously closed at $32.36, but opened at $30.90. Wells Fargo & Company currently has an equal weight rating on the stock. Carter's shares last traded at $31.44, with a volume of 158,026 shares changing hands.

CRI has been the topic of several other research reports. UBS Group reiterated a "buy" rating on shares of Carter's in a research note on Wednesday, July 8th. Citigroup restated a "buy" rating on shares of Carter's in a research note on Tuesday, July 21st. BMO Capital Markets initiated coverage on Carter's in a report on Tuesday, September 8th. They set an "outperform" rating and a $40.00 target price for the company. Capital One Financial set a $40.00 target price on Carter's in a report on Tuesday, September 8th. Finally, Wall Street Zen lowered Carter's from a "strong-buy" rating to a "buy" rating in a research report on Saturday, September 26th. Two analysts have rated the stock with a Strong Buy rating, four have issued a Buy rating, three have issued a Hold rating and one has given a Sell rating to the company's stock. According to data from MarketBeat.com, the company presently has a consensus rating of "Moderate Buy" and an average target price of $39.38.

Institutional Investors Weigh In On Carter's

Hedge funds and other institutional investors have recently made changes to their positions in the company. WINTON GROUP Ltd raised its stake in shares of Carter's by 1.9% during the 2nd quarter. WINTON GROUP Ltd now owns 17,560 shares of the textile maker's stock worth $723,000 after buying an additional 322 shares during the period. Versant Capital Management Inc grew its stake in Carter's by 39.4% in the 3rd quarter. Versant Capital Management Inc now owns 3,711 shares of the textile maker's stock valued at $116,000 after acquiring an additional 1,049 shares during the period. Elevation Wealth Partners LLC grew its stake in Carter's by 3,889.3% in the 3rd quarter. Elevation Wealth Partners LLC now owns 1,117 shares of the textile maker's stock valued at $35,000 after acquiring an additional 1,089 shares during the period. Nykredit A S acquired a new stake in Carter's in the 2nd quarter valued at $72,000. Finally, Bank of America Corp DE increased its holdings in Carter's by 5.0% in the 1st quarter. Bank of America Corp DE now owns 66,031 shares of the textile maker's stock worth $2,361,000 after acquiring an additional 3,132 shares in the last quarter.

Carter's Stock Performance

The company has a market cap of $1.16 billion, a PE ratio of 5.90, a price-to-earnings-growth ratio of 3.65 and a beta of 0.84. The firm's fifty day moving average is $33.89 and its 200 day moving average is $36.59. The company has a current ratio of 2.47, a quick ratio of 1.50 and a debt-to-equity ratio of 0.55.

Carter's (NYSE:CRI - Get Free Report) last posted its quarterly earnings data on Friday, July 31st. The textile maker reported $0.26 earnings per share for the quarter, topping analysts' consensus estimates of $0.06 by $0.20. The company had revenue of $615.49 million during the quarter, compared to analysts' expectations of $605.68 million. Carter's had a net margin of 6.55% and a return on equity of 12.78%. The firm's revenue for the quarter was up 5.2% on a year-over-year basis. During the same period in the prior year, the business posted $0.17 earnings per share. As a group, research analysts predict that Carter's, Inc. will post 3.28 EPS for the current fiscal year.

Carter's Dividend Announcement

The company also recently disclosed a quarterly dividend, which was paid on Friday, September 25th. Shareholders of record on Tuesday, September 1st were paid a dividend of $0.25 per share. This represents a $1.00 annualized dividend and a yield of 3.2%. The ex-dividend date was Tuesday, September 1st. Carter's's payout ratio is 18.73%.

Carter's Company Profile

Carter's, Inc NYSE: CRI is a designer, marketer and retailer of apparel and related products for babies and young children. The company's offerings include bodysuits, sleepwear, playwear, outerwear, footwear, accessories, gifts, bedding and other products for infants, toddlers and young children.

Carter's markets products primarily under the Carter's and OshKosh B'gosh brands, as well as Skip Hop, which offers baby and children's gear, accessories and related products. The company sells through its own retail stores and websites, wholesale partners, department stores, mass merchants and other retailers.

The company traces its history to 1865, when it was established as the William Carter Company.

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