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Carter’s Rating Upgraded to “Outperform,” Next Sales Rose by 0.4%

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Jan. 12 2016, Updated 4:45 p.m. ET

Price movement of Carter’s

Carter’s (CRI) rose by 4.7% to close at $93.19 per share as of January 4, 2016. The stock’s price movements on a weekly, monthly, and year-to-date (or YTD) basis are 3.7%, 2.2%, and 3.7%, respectively.

Currently, CRI is trading 2.0% above its 20-day moving average, 3.8% above its 50-day moving average, and 3.8% below its 200-day moving average.

The First Trust Mid Cap Growth AlphaDex ETF (FNY) invests 0.82% of its holdings in Carter’s. The ETF tracks a tiered, equal-weighted index of mid-cap growth stocks chosen by S&P’s AlphaDex selection methodology from the S&P 400 Index.

Competitors of Carter’s and their market capitalizations are below:

  • Target (TGT) — $45.5 billion
  • The Gap (GPS) — $10.8 billion
  • Kohl’s (KSS) — $9.7 billion
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Oppenheimer upgraded Carter’s rating

Oppenheimer upgraded Carter’s rating from “perform” to “outperform” and set its price target at $108.0 per share. Carter’s has a high projection for fiscal 2015 adjusted EPS (earnings per share).

Performance of Carter’s in fiscal 3Q15

Carter’s reported fiscal 3Q15 net sales of $849.8 million, a rise of $6.4% when compared to net sales of $798.9 million in fiscal 3Q14. Its net income and EPS rose to $79.3 million and $1.51, respectively, in fiscal 3Q15, compared to $65.9 million and $1.23, respectively, in fiscal 3Q14.

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Projections

The company has made the following projections for fiscal 4Q15 and fiscal 2015:

Fiscal 4Q15:

  • Net sales fall of 2% compared to fiscal 4Q14
  • Adjusted EPS in the range of $1.22–$1.30

Fiscal 2015:

  • Net sales rise of ~4% over fiscal 2014
  • Adjusted EPS to rise in the range of 13%–15% compared to adjusted EPS of $3.93 in fiscal 2014

Carter’s PE (price-to-earnings) and PBV (price-to-book value) ratios are 20.9x and 5.7x, respectively, as of January 7, 2016.

Sales of Next Brands

Next Brands’ full price sales from October 26 to December 24, 2015, rose by 0.4%. The company has projected full price sales growth of 3.7% for the year ending January 2016 compared to last year. Its projected group profit before tax is 817 million British pounds for the year ending January 2016. Its projected EPS growth is 4.8% for the year ending January 2016.

Next has also declared a special dividend of 60 pence per share. It purchased 586,000 shares for cancellation at a price of 6,817.0 pence per share.

On January 6, 2016, it purchased 378,000 shares for cancellation at a price of 6870.8 pence per share. On January 7, 2016, it purchased 419,000 shares for cancellation at a price of 6857.8 pence per share.

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