Cowen Says Childrens Place Is 'The Place to Be' For Shoppers And Investors

Childrens Place Inc PLCE, a retailer that specializes in children's apparel, is considered to be "the place to be" for both shoppers and investors, according to Cowen.

The Analyst

Cowen's David Buckley initiated coverage of The Childrens' Place stock with an Outperform rating and $160 price target.

The Thesis

Cowen's Consumer Tracker Survey among households with children aged from newborn to nine years old found that Childrens Place is one of the top-ranked brands, Buckley said a note. Specifically, the brand was ranked as the second-most preferred at 13 percent in the infant to four-year-old age group and 15 percent in the five to nine age group.

The company's popularity could be attributed to multiple initiatives, including a new app, a segmentation/personalization strategy to better target customers, a centralized inventory system, the ability to ship from stores, according to Buckley. The company has identified more initiatives ahead to sustain its momentum, including a customized marketing and email strategy that is gender and age specific to customers.

The analyst sees existing and upcoming initiatives as one of the key reasons to be buyers as the stock ahead of a sales growth and operating margin expansion. The other factors include room to expand in the domestic wholesale and international markets, as well as being positioned to gain market share from "financially distressed" competitors.

Price Action

Shares of Childrens Place were trading lower by 1.5 percent Thursday at $140.20.

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