What happened

Shares of The Children's Place (PLCE 12.57%) are soaring 12% in morning trading Monday after the two Wall Street firms upgraded the childrens apparel retailer ahead of its earnings report later this week.

So what

Monness Crespi Hardt analyst Jim Chartier upgraded the retailer from neutral to buy and set a $93-per-share price target on the stock, some 20% above Children's Place's closing price last Friday.

Chartier contends management's conservative guidance in combination with the economy reopening and the government stimulus checks is going to lead to blowout earnings.

A young couple walks down the street holding shopping bags.

Image source: Getty Images.

March and April consumer spending is well above the levels set two years ago before the coronavirus pandemic.

"Given much better than expected consumer spending and conservative guidance, we are raising our 1Q EPS estimate more than $1 above consensus and see the potential for more upside," Chartier said.

Wedbush analyst Jen Redding also upgraded Children's Place to an outperform rating from neutral for similarly bullish reasons, but she sees the potential for the apparel retailer to nearly double in value. She set a price target of $150 per share.

Now what

While the retail sector enjoyed a decided boost from the government-issued stimulus, perhaps all that was needed was a reopening of business.

It's possible the stimulus checks just artificially inflated demand and likely pulled forward sales, setting the stage for disappointment for future quarters for the apparel retailer.