UBS Raises Carter’s Price Target, Sees Upside Risk to Guidance

UBS raised its price target on Carter’s (NYSE: CRI) to $40 from $33 while maintaining a Neutral rating.

The analyst stated that Carter’s fiscal 2026 earnings per share guidance appears broadly in line with market expectations, but sees risk slightly skewed to the upside. UBS pointed to operational improvements under new CEO Doug Palladini, suggesting the company may issue a more positive-than-anticipated outlook.

If that were to occur, UBS believes investors could increasingly view Carter’s as capable of returning to approximately $6.20 in earnings per share over time, consistent with its average level between 2017 and 2024, compared with an estimated $3.25 for fiscal 2025. Such a shift could drive an expansion in the stock’s current valuation of roughly 13 times forward earnings.

The options market is currently pricing in a potential move of plus or minus 7.0% around the earnings event, compared with a historical average move of 5.2%. UBS indicated that volatility risk appears modestly skewed to the upside.