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Strength Seen in The Children's Place (PLCE): Can Its 16% Jump Turn into More Strength?

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The Children's Place (PLCE - Free Report) shares soared 16% in the last trading session to close at $90.03. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 0.3% loss over the past four weeks.

Shares of The Children's Place have gained owing to the optimism surrounding its long-term growth prospects. Analysts at Wedbush and Monness Crespi upgraded their recommendations on the stock, per media reports. The company has been on track with growth efforts such as enhancing digital capabilities, augmenting supply chain and improving financial flexibility. The company is leaving no stone unturned to improve its top-line performance and expand customer base. It is focusing on superior product strategy to resonate well with millennial customers and advancing omni-channel capabilities.

With changing consumer shopping pattern, the company has been making efforts to lower dependency on brick-and-mortar platform and shift toward digitization. It is aiming mall-based brick-and-mortar portfolio to account for less than 25% of revenues entering fiscal 2022.
 

Price and Consensus

Price Consensus Chart for PLCE

This children's clothing and accessories chain is expected to post quarterly loss of $0.44 per share in its upcoming report, which represents a year-over-year change of +77.6%. Revenues are expected to be $333.33 million, up 30.6% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For The Children's Place, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on PLCE going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>


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