Carter's Shares Rise After Sterne Agee Upgrade

NEW YORK (AP) — After rising nearly 38 percent so far this year, Carter's Inc. shares may gain another 25 percent in the next 12 months, said a Sterne Agee analyst, upgrading the maker of infant and children's clothes.

Carter's should post strong results in the third quarter, on which it is set to report Oct. 27, said analyst Margaret Whitfield in a note to investors Thursday, because of strong performance at its retail shops and tight inventories.

Wall Street analysts surveyed by Thomson Reuters forecast profit of 66 cents per share for the third quarter. Whitfield has an earnings estimate of 64 cents per share.

Last year, Carter's posted net income of 60 cents per share in the third quarter, excluding charges related to closing a distribution facility.

She boosted her rating to "Buy" from "Neutral" and set a target price of $33 on the stock.

Carter's shares were up $1.03, or 3.9 percent, to $27.51 in midday trading. Meanwhile, many retailers' shares surged Thursday as chains reported better-than-expected sales data for September.

Moreover, Whitfield said, Carter's, which makes OshKosh kid's clothing, has several new growth initiatives in the works for next year, including an e-commerce and loyalty programs. She sees "significant opportunities" for store expansion, including up to 35 new stores in the U.S.