UPDATE: Oppenheimer Initiates Carter's at Perform on Stable Model

In a report published Thursday, Oppenheimer analyst Anna Andreeva initiated coverage on Carter's (NYSE: CRI) with a Perform rating and $70.00 price target.

In the report, Oppenheimer noted, “With a 15% market share of the $22 billion apparel market for kids newborn to seven years old, one of the more defensive segments of apparel, CRI is in the middle innings of growth through the wholesale, retail, e-commerce, and international channels, with an opportunity for 20%-plus EPS growth in the next few years. Operating margins are 250 bps away from peak levels and should benefit from a mix shift to higher-profitability international and e-commerce channels, although higher SG&A spend for the second year in a row is an offset. Trading at 22x our 2013 and 18x our 2014 EPS estimates, the high end of historical valuations, we believe the stock already reflects improved fundamentals. With a stable model and strong balance sheet, CRI just introduced its first ever dividend ($0.64, or less than 1% yield) and a new $300 million share buyback (~5 million shares at current prices, or $0.40 to annual estimates), and we think there could be additional shareholder-friendly actions down the road.”

Carter's closed on Wednesday at $73.38.