Barclays Starts KinderCare Learning Companies (KLC) at Overweight

Barclays analyst Manav Patnaik initiates coverage on KinderCare Learning Companies (NYSE: KLC) with a Overweight rating and a price target of $38.00.

The analyst comments: "As one of the largest providers of quality early childcare education (ECE), KLC stands to benefit from the clear childcare needs in the US; i.e. A large TAM (~$76B), with pricing power (3%-5%), that leads to a profitable growth strategy... driven by their multiple go-to-market channels - which includes their extensive network of community-based centers (~70% of revenues), employer-sponsored programs (~18% of revenues; albeit on-site only ~4%), and before- and after-school sites (~7% of revenues). Figure 4 illustrates this consistency historically (~9% Same-center revenue CAGR 2018-2023), and also shows its continuation based on our estimates (with further upside potential from Pricing and M&A, amongst others). As such we value KLC at ~15x our FY26E Barclays Adjusted EBITDA to get to our $38 PT - which represents about 25% potential upside."

For an analyst ratings summary and ratings history on KinderCare Learning Companies click here. For more ratings news on KinderCare Learning Companies click here.

Shares of KinderCare Learning Companies closed at $28.32 yesterday.

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