Morgan Stanley cuts KinderCare stock rating on industry headwinds

try{ var _=i o; . if(!_||_&&typeof _==="object"&&_.expiry Oil prices trim early losses as Iran supply fears overshadow Russia measures Hormuz oil flows down 97% from normal levels, Goldman Sachs says Gold prices rise but head for second weekly loss as Iran war spurs inflation fears Wall Street ends deep in the red amid renewed spike in oil prices due to Iran war (South Africa Philippines Nigeria) Morgan Stanley cuts KinderCare stock rating on industry headwinds By Analyst Ratings Published 03/13/2026, 05:09 AM Morgan Stanley cuts KinderCare stock rating on industry headwinds 0 KLC 3.34% Investing.com - Morgan Stanley downgraded KinderCare Learning Companies (NYSE:KLC) to Underweight from Equalweight and lowered its price target to $2.50 from $6.00. The firm cited multiple headwinds facing the childcare industry that are expected to prevent a recovery toward typical growth over the next 12 months. These include enrollment weakness, lower center growth due to plans to shed weaker centers, relatively stagnant utilization rates, and continued childcare affordability issues.The downgrade comes as KLC shares trade at $3.40, near their 52-week low of $3.17, with the stock down 79% over the past year. An InvestingPro tip notes the company’s short-term obligations exceed liquid assets, with a current ratio of 0.71 reflecting liquidity pressures. Morgan Stanley noted that KinderCare does not benefit from a profitable and higher-growth back-up care segment like competitor BFAM, leaving it unable to offset industry weakness in full-time care. Full-service daycare operates on low margins that are affected by operating leverage, which is reflected in the company’s 2026 guidance. The firm said it does not expect KinderCare to return to its normalized growth algorithm in the near term and has factored in a lower growth rate. Additional pressures include decelerating pricing and the potential for headcount reductions or budget constraints. Morgan Stanley said it does not see positiv...