Carter's (CRI) faces potential volatility as Q3 earnings and guidance could drive shares either higher or lower, UBS Securities said in a note Monday.
Analysts said they see roughly equal chances of an upside or downside reaction to Carter's upcoming earnings.
An earnings beat and raised guidance could lift the stock's valuation, while a low-quality beat along with weaker-than-expected Q4 guidance could lead investors to view the business as slowing, with higher oil and cotton prices likely pressuring margins, according to the note.
The options market expects a 14.9% share price move around the report, well above the historical average of 5.6%, the investment firm said.
The analysts expect a modest Q3 earnings beat and Q4 earnings guidance of $1.50 to $1.75 per share, with no change to the full-year outlook. The company is estimated to report Q3 financial results in the last week of October.
UBS Securities lowered its price target on Carter's to $38 from $41, and kept its neutral rating.
Price: 32.14, Change: +0.69, Percent Change: +2.19
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