UBS revised its one-year price target for Carter’s Inc. (NYSE: CRI) to $40 from $33 on Wednesday while preserving a Neutral rating on the shares. The bank attributed the change to improving fundamentals under the company’s new chief executive, Doug Palladini.
The market has already moved ahead of the upgraded target: Carter’s shares were trading at $42.08 at the latest quoted price, exceeding UBS’s new target level. The stock has returned 7.61% over the last week and, according to the InvestingPro data cited by UBS, has risen 63.39% over the past six months.
In its note, UBS said management’s fiscal 2026 earnings per share guidance is expected to come in line with consensus expectations, with the risk profile modestly tilted to the upside. The firm also pointed to derivatives market pricing around the guidance event, noting that options are implying a potential move of plus or minus 7.0% versus a historical average move of 5.2%.
UBS provided an updated earnings estimate for Carter’s fiscal 2025, setting EPS at roughly $3.25. The firm contrasted that projection with a longer-run average EPS of about $6.20 for the period from 2017 through 2024.
Operationally, Carter’s reported a high single-digit percentage increase in consolidated net sales for the fourth quarter of fiscal 2025 compared to the prior year. That result marked the retailer’s third straight quarter of comparable retail sales growth in North America. For the full fiscal year 2025, consolidated net sales grew in the low single-digit percentage range versus fiscal 2024.
Separately, private equity activity in a related industrial sector continued as KPS Capital Partners announced an agreement to acquire a controlling stake in Novacel, a maker of surface protection solutions. Under that arrangement, Compagnie Chargeurs Invest SA will retain a 25% ownership stake and will invest alongside KPS. Financial terms of the transaction were not disclosed.
Taken together, these updates capture both investor-facing valuation adjustments for a major children’s apparel retailer and a private-market transaction in the specialty manufacturing space. UBS’s revision reflects management and operational signs of stabilization at Carter’s while market pricing and derivatives activity show elevated investor attention ahead of guidance-related catalysts.
Summary
UBS raised Carter’s price target to $40 but kept a Neutral rating, citing better fundamentals under CEO Doug Palladini. The stock trades above the new target, recent sales trends show sequential improvement, and options markets imply elevated moves around guidance. Separately, KPS agreed to buy a controlling stake in Novacel with Compagnie Chargeurs Invest SA retaining 25%.