Carter's stock gets a credit lift as Moody's turns stable

Published on 10/04/2026 at 14:18 | Editorial responsibility: Rafael Müller, Editor-in-Chief AD HOC NEWS

Carter's stock faces a stable credit outlook after Moody's October 1, 2026 update. Second-quarter sales rose 5 percent to USD 615 million, while analysts target USD 40.88.

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Carter's stock was last at USD 31.59 on the NYSE on October 2, 2026 at 4:00 p.m. ET, down 0.38 percent from USD 31.71. The immediate company story is credit-related: Yahoo Finance reported on October 1, 2026 that Moody's Ratings changed Carter's outlook from negative to stable while affirming its Ba2 corporate family rating.

Credit metrics set the tone

The credit update cited cash reserves of USD 654 million as of July 2026, including USD 132 million in tariff refunds. Moody's projected debt to EBITDA at 2.5 times over the following 12 to 18 months, while warning that renewed trade-policy pressure could weigh on the retailer's finances.

The rating framework also sets measurable conditions for improvement. Yahoo Finance said an upgrade would depend on sustained top-line growth, double-digit operating margins and leverage below 3.75 times; pressure could return above 4.5 times.

Second-quarter recovery had a cost

Carter's reported second-quarter fiscal 2026 net sales of USD 615 million on July 31, 2026, up from USD 585 million a year earlier. The company's release also showed adjusted operating income of USD 18 million versus USD 12 million, a 54 percent increase, while diluted EPS was USD 2.87, according to Carter's.

The headline GAAP earnings figure benefited from a USD 132 million recovery of previously paid import duties and related interest. That distinction matters because adjusted EPS was USD 0.26, compared with USD 0.17 in the prior-year quarter, according to MarketBeat.

Targets sit above the market

MarketBeat listed a Moderate Buy consensus from 10 analysts and an average price target of USD 40.88 in its September 13, 2026 report. That target lies 29.4 percent above the October 2 price of USD 31.59, creating a clear valuation gap rather than a single-house forecast.

The next earnings checkpoint is October 26, 2026, before the market opens, with consensus EPS of USD 0.89 and expected revenue of USD 753.38 million, according to MarketBeat. The report will test whether the improved adjusted profitability can continue after the tariff-related benefit in the second quarter.

Stock remains below its yearly high

Carter's was last at USD 31.59 on the NYSE on October 2, 2026 at 4:00 p.m. ET, with a session range of USD 31.24 to USD 32.20. Its 52-week range was USD 27.15 to USD 44.44, and market capitalization stood at USD 1.2 billion.