Carter's shares rise on positive analyst note

Shares of Carter's Inc., which owns the OshKosh children's clothing brand, rose on Tuesday, after an analyst said results have improved and raised his estimates and target price on the stock.

Shares rose $1.30, or 5.6 percent, to $24.68 during morning trading. The stock has traded between $11.94 and $25.36 over the past year.

C.L. King analyst Scott D. Krasik said in a note to investors that Carter's results have been stronger than expected. In the first quarter, profit rose 42 percent, above analyst expectations, helped by better sales of its Carter's children's clothing brand and OshKosh.

However, the Atlanta-based company said in April it expects second-quarter sales to fall compared with a year ago, due to lower sales.

Still, Krasik said the company's guidance is conservative, based on visits to Carter's and OshKosh outlet stores.

"Our channel checks at key wholesale customers have been positive and reinforce our thesis that basic baby apparel is the most defensive discretionary consumer category and Carter's continues to gain market share within the space," he said in an investor's note. "Our visits to Carter's and OshKosh outlet stores also anecdotally confirm that sales trends have been positive, promotional events consistent with plan and clearance levels low."

He reiterated his "Strong Buy" rating on the stock and raised his price target to $30 from $26.

He also raised his fiscal 2009 estimate to $1.73 per share from $1.58 per share and his 2010 earnings estimate to $1.99 per share from $1.82 per share. Analysts polled by Thomson Reuters, on average, predict yearly revenue of $1.54 per share and $1.70 per share, respectively.