UPDATE: Goldman Sachs Upgrades Carter's, Valuation No Longer an Obstacle

In a report published Tuesday, Goldman Sachs analyst Taposh Bari upgraded the rating on Carter's (NYSE: CRI) from Neutral to Buy, and raised the price target from $77.00 to $89.00.

In the report, Goldman Sachs noted, “We upgrade Carter's – one of the best managed (in our view) and fastest growing companies in our coverage universe – to Buy. Despite 6% YTD outperformance vs. our coverage group, and estimates already above consensus, we are now more comfortable justifying a premium valuation multiple based on a well-executed investment year (to-date) and accelerated EPS growth into 2014E. Going forward, sources of upside include 1) strong revenue growth, 2) reduced SG&A and capex spend, 3) a positive international growth inflection and 4) an optimized capital structure. As a result, we raise our estimates and our 12-month price target to $89, which provides 17% upside.”

Carter's closed on Monday at $75.89.