CRI - BofA eyes Carter's and Children's Place with pregnancy kits flying off shelves

Bank of America sees a healthier backdrop for the children's apparel market. "We view pregnancy test/ovulation kit unit growth as a better leading indicator and see signs of improvement after recent stagnating birth trends. Additionally, market share gains from competitor bankruptcies and lower product costs should lead to an improved operating environment in 2021," notes the firm. Pregnancy test sales have increased on average 9.5% Y/Y since April, leading to confidence in the projection for a bump higher in birth rate ahead. BofA reiterates a Buy rating on Carter's ([[CRI]] +0.3%) and hikes The Children's Place ([[PLCE]] +3.8%) to a Neutral rating from Underperform. The timing of a mini baby boom could be good as CRI and PLCE both have very low growth grades.