Consensus Underestimates PLCE Potential, Goldman Sachs Reports

Goldman Sachs reports that while The Children's Place PLCE 3Q results were disappointing due to unfavorable weather and several merchandising issues, “we believe these issues were mitigated in 4Q as weather has gotten much colder and assortments are starting to look more on-brand.” “Accordingly, we see limited risk to 4Q guidance,” Goldman Sachs writes. “With business starting to turn the corner, we view PLCE as a compelling idea for 2011 as its turnaround story will start to play out in 1H and we believe consensus is underestimating sales/margin potential for 2011-2012.” The Children's Place closed Wednesday at $47.18.