Children's Place Rises; Analysts Cite Back-to-School Potential

Children's Place traded higher Monday after the specialty retailer's stock was upgraded by analysts at Wedbush and Monness Crespi.
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Shares of Children's Place  (PLCE) - Get Report jumped Monday after the specialty retailer was upgraded by analysts at Wedbush and Monness Crespi.

Shares of the Secaucus, N.J., company at last check rose 12% to $87.23.

Wedbush analyst Jennifer Redding upgraded the stock to outperform from
neutral and raised her 12-month price target to a Wall-Street-high $150 from $48.

“The company deserves high marks ... not only for weathering a pandemic that canceled in-person learning but also for reinventing the company and ultimately positioning the company well for long-term success, post-pandemic,” Redding
wrote in a note, according to Bloomberg News.

The investment firm’s proprietary data show positive signals that indicate room for “material” gains to revenue and gross margin in the first quarter and beyond.

Redding said consensus estimates are “far too low” given what she says will be a “record back-to-school and holiday season.”

Redding added that the child tax credits expected in July will also help ahead of school openings in the fall. 

Children’s Place "will thrive given incremental monthly income as high as $300 per kid, per family starting in July as child tax credits are expected to reach mailboxes,” she said.

Monness Crespi analyst Jim Chartier upgraded the specialty chain for children's clothing to buy from neutral, predicting Children's Place would post earnings beat of more than a $1 a share when it reports results May 20.

Chartier sees potential for full-year EPS to top the current consensus by 50%.

"The reopening economy and government stimulus has driven strong consumer demand across all categories in March and April with many retailers reporting sales above March/April 2019 levels,” Chartier wrote in a note in a report from Bloomberg News.

The backdrop for the rest of the year 'is improved with most schools planning for a full reopen in the fall," he added.

Monness Crespi has a price target of $93 for Children's Place.