Carter's (CRI) Added to FBR Capital Alpha Generator List
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FBR Capital analyst Susan Anderson added Carter's (NYSE: CRI) to the Alpha Generator list citing a very attractive entry point. The firm reiterated an Outperform rating and price target of $111.
Anderson commented, "On the 2Q call, reflective of a more conservative outlook on spring 2017 bookings, CRI management lowered FY revenue (to +5% to +6% from +6% to +7%) and EPS guidance (to $5.08 from ~$5.08–$5.17). Since then, concerns have emerged over CRI's 2017 bookings and weaker retail sales, which have helped to drive the stock down. We believe these concerns are overdone. Our checks show clean inventory with clearance now down year over year for several weeks and promos about flattish for the quarter. Additionally, even if retail sales are light at current levels, we believe lighter retail sales are more than priced into the stock. Finally, we do not expect another step down in 2017 orders, as we believe preliminary spring 2017 orders of –LSD entailed department store weakness, and mass continues to perform well with orders intact. We believe that CRI at 15x 2017 EPS and now down –24% since 2Q EPS represents one of the best opportunities to get into a very attractively valued, high-quality stock. We reiterate our Outperform rating and $111 price target based off of 19x FY2 P/E and add CRI to the Alpha Generator list."
Shares of Carter's closed at $85.00 yesterday.
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