BOSTON (AP) -- A Janney Capital Markets analyst on Monday downgraded shares of Children's Place, citing heightened competition among retailers of children's clothing and accessories, as well as financial pressures on low-income shoppers.
THE SPARK: Analyst Adrienne Tennant cut shares of Children's Place Retail Stores Inc. to "Neutral" from "Buy." She also reduced her fiscal 2012 earnings-per-share estimate and cut her 12-month estimate of the stock's fair value to $49 from $59.
THE ANALYSIS: Tennant said in a note to clients that the children's clothing and accessories segment is highly competitive, with discounting and promotions recently becoming more aggressive. Those factors "will make it highly difficult" for Children's Place to increase its share of the market this year, she said.
Lower-income consumers that Children's Place targets remain under financial pressure, she said, which could hurt the company's outlook.
Long-term investors may find the company's shares attractively priced, Tennant said. However, she expects the stock will "trade sideways until there is greater clarity on positive fundamental trends."
SHARE ACTION: Shares of Children's Place, based in Secaucus, N.J., fell $1.50, or 3.1 percent, to $46.46 in morning trading. The stock is near the lower end of its 52-week range of $42.21 to $62.24.