Carter's (CRI) Buy Rating Reiterated at Goldman Sachs

Goldman Sachs reiterated a Buy rating on Carter's (NYSE: CRI) with a price target of $100. Analyst Taposh Bari believes EPS growth is set to accelerate.

"Our constructive view is shaped by a resilient top-line trajectory across all channels, notably e-commerce. We model sales growth of 12.7% in the quarter, above consensus’ 11% and guidance of 8-10%," said Bari. "We also see CRI resuming margin expansion in 2H14, leading to EPS growth acceleration (from -4% in 1H to +36% in 2H). Margin enhancing drivers include: 1) leverage on distribution costs, and 2) price increases."

"Finally, we view CRI as a beneficiary of improving demographics, both in the US and abroad. China, a market where CRI is still effectively nonexistent, recently relaxed its one-child policy. We believe this market (#2 kids apparel market after the US) is within CRI management’s sights and one that the company would likely enter within the next 1-2 years. Meanwhile in the US, the latest government reading released in May 2014 pointed to an increase in live births in 2013, the first YoY increase since 2007. While CRI managed to grow revenues an average of 11% from 2008-2012, a multi-year stretch of live birth declines, an improving backdrop should be considered a positive," added the analyst.

For an analyst ratings summary and ratings history on Carter's click here. For more ratings news on Carter's click here.

Shares of Carter's closed at $69.12 yesterday.

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