Why Carter's Stock Slipped Today
Key Points
He also didn't move from his hold recommendation.
Investors have been cautious on the stock since the apparel company reported second-quarter earnings.
- 10 stocks we like better than Carter's ›
Children's clothing retailer Carter's (NYSE: CRI) wasn't a stock investment fit for adults as the trading week started. Investors traded out of the company after an analyst cut his price target aggressively. The damage was limited, however, as Carter's closed the day only 1% lower.
An uncomfortable move
Before market open, Ike Boruchow from the prominent U.S. bank Wells Fargo reduced his fair value assessment on Carter's to $30 per share from $42. In doing so, the analyst maintained his equal weight (hold, in other words) recommendation.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Image source: Getty Images.
The reasoning behind Boruchow's rather assertive cut wasn't immediately apparent. By keeping his equal weight rating intact, the analyst reflects the rather cautious stance many investors have toward Carter's stock these days.
At the end of July, the company reported its second-quarter earnings. While it notched a significant beat on profitability, the bottom line was positively affected by a $132 million payment from the U.S. government to compensate Carter's for tariffs it had paid (which a federal judge later ruled illegal). The company also missed on its third-quarter guidance.
Digesting these factors, investors spent much of August trading out of Carter's. The stock has yet to fully recover from the rout.
Niche player
Like Boruchow, I don't find Carter's to be an exciting, high-potential stock. It's posted declines in annual sales over four of the past five years, and its profitability has been thin, even by the standards of the typically low-margin retail space. And while it sells good, attractive products, it isn't powerful enough in its niche to be compelling, in my view.
Should you buy stock in Carter's right now?
Before you buy stock in Carter's, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Carter's wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $379,123!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,408,822!*
Now, it’s worth noting Stock Advisor’s total average return is 950% — a market-crushing outperformance compared to 215% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of October 12, 2026.
Wells Fargo is an advertising partner of Motley Fool Money. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Carter's. The Motley Fool has a disclosure policy.
