UBS maintains Buy rating on KinderCare Learning with new PT of $11.

UBS maintains Buy rating on KinderCare Learning with new PT of $11.

Swiss financial services giant UBS has revised its price target for KinderCare Learning Companies, Inc. (KLC) to $11, while maintaining a "Buy" rating. This adjustment comes following a series of financial reports that have indicated mixed performance for the company. The new price target represents a significant reduction from UBS's previous estimate of $20.

KinderCare Learning, a leading provider of early childhood education and care services in the United States, operates approximately 1,568 centers with a licensed capacity of 210,618 children. The company offers a range of programs, including infant, toddler, preschool, kindergarten, and before-and-after-school services, primarily under the names KinderCare Learning Centers (KCLC) and KinderCare Education at Work (KCE at Work). Additionally, its Champions program provides educational services through approximately 948 sites in 25 states and the District of Columbia.

UBS's decision to lower the price target reflects ongoing concerns about KinderCare's future performance. The company's second-quarter 2025 earnings revealed an earnings per share (EPS) of $0.22, which fell short of the forecasted $0.26. The company's revenue also missed expectations, totaling $700 million compared to the anticipated $705.72 million. These results contributed to the recent stock price decline, with shares trading at $7.53, significantly below the fair value estimate.

Despite the challenges, KinderCare has outlined several initiatives aimed at improving occupancy and center-level performance. The company expects 2025 revenue between $2.75 billion and $2.8 billion, with adjusted EBITDA ranging from $310 million to $320 million. However, the firm anticipates occupancy declines of 1-1.5% for the year.

The recent legislative developments, such as the Child Care and Development Block Grant Act, may provide some support for the company's performance. UBS's adjustment reflects these ongoing concerns for investors regarding KinderCare's future performance.

References:
[1] https://www.marketscreener.com/news/ubs-adjusts-kindercare-learning-price-target-to-11-from-20-maintains-buy-rating-ce7c51d9da8cf722
[2] https://www.ainvest.com/news/goldman-sachs-lowers-kindercare-learning-price-target-20-maintains-buy-rating-2508/