Morgan Stanley analyst Toni Kaplan upgrades $KinderCare Learning Companies (KLC.US)$ to a buy rating, and maintains the target price at $30.
According to TipRanks data, the analyst has a success rate of 58.2% and a total average return of 3.5% over the past year.
Furthermore, according to the comprehensive report, the opinions of $KinderCare Learning Companies (KLC.US)$'s main analysts recently are as follows:
KinderCare Learning's stock has seen a significant decline of 28% this month. Factors contributing to this downturn include a less favorable earnings report from competitor Bright Horizons Family Solutions, which showed slowing revenue growth. Furthermore, the recent election outcomes have introduced potential uncertainties due to KinderCare's considerable exposure to government subsidies. Despite this, analysts believe the market reaction may be exaggerated as KinderCare's fundamental business aspects remain largely stable.
After KinderCare Learning's Q3 results, the company's adjusted EBITDA exceeded expectations, attributed to changes in tuition registration fees and certain timing advantages. The management also reaffirmed its outlook for 2024 and beyond during their discussion. Being the largest childcare provider in the U.S., KinderCare stands to gain from its scale in recruiting both teachers and children.
The notable drop in shares, contrasted by stable forecasts, is cited as a reason for a positive outlook on KinderCare Learning. As long as execution remains solid, KinderCare presents an appealing risk/reward scenario based on projections for 2026. The intact pricing model is seen as a crucial driver of organic EBIT growth, supported by its long-duration and fairly recurring revenue.
Note:
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