Wells Fargo Raises Carter’s Price Target to $42, Upgrades Rating
CRI•Wells Fargo upgraded Carter’s to Equal Weight from Underweight and boosted its price target to $42 from $30, citing improved execution under new leadership, stronger direct-to-consumer momentum and potential tariff relief. The firm raised fiscal 2026 EPS forecast to $3.30 (from $3.00) and fiscal 2027 to $3.80 (from $3.50).
1. Wells Fargo Rating Upgrade
Wells Fargo upgraded Carter’s to Equal Weight from Underweight, boosting its price target to $42 from $30, driving a 3.5% premarket gain.
2. Leadership and DTC Execution
The firm highlighted execution improvements under the retailer’s new leadership team and evolving direct-to-consumer strategy as key drivers of operational strength.
3. Tariff Reductions Offer Inorganic Upside
The analyst cited potential lower tariff rates as an under-appreciated source of cost savings that could further enhance margins and profitability.
4. Forecast Revisions and Valuation
Wells Fargo raised its fiscal 2026 EPS estimate to $3.30 (from $3.00) and fiscal 2027 to $3.80 (from $3.50), lifted Q2 comparable sales outlook and set its $42 target at 11x fiscal 2027 earnings.
