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Investing.com - UBS maintained its Neutral rating and $33.00 price target on Carter’s (NYSE:CRI) in a research note released Friday. The stock currently trades at $32.70, slightly below InvestingPro’s Fair Value estimate, suggesting modest undervaluation despite a steep 36.6% year-to-date decline.
The investment bank assessed whether new CEO Doug Palladini could revitalize the children’s apparel retailer’s sales and margin trends, consulting with an industry expert to inform its analysis.
UBS expressed modestly increased confidence in Carter’s new performance improvement plan, highlighting potential benefits from the company’s initiatives to eliminate 20-30% of SKUs and shorten lead times. The company maintains a healthy current ratio of 2.26, with liquid assets exceeding short-term obligations.
Despite these positive self-help measures, UBS cited persistent growth headwinds facing Carter’s, noting the company operates in a "very slow growing industry" while already maintaining high market share.
The firm indicated it might reconsider its Neutral stance if it could identify a path for Carter’s to accelerate its sales growth rate, but currently does not see "enough growth potential to catalyze P/E expansion."
In other recent news, Carter’s Inc. reported its third-quarter 2025 earnings, showing a mixed financial performance. The company’s earnings per share (EPS) came in at $0.74, slightly surpassing the analyst forecast of $0.72. This represents a 2.78% surprise in EPS. However, Carter’s revenue for the quarter was $758 million, falling short of the projected $771.17 million, and showing no growth compared to the previous year. Additionally, Carter’s Board of Directors declared a quarterly dividend of $0.25 per share. This dividend will be payable on December 5, 2025, to shareholders who are recorded by November 24, 2025. These developments reflect the company’s recent financial activities and shareholder decisions.
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