Morgan Stanley analyst Jay Sole said Children's Place remains in the early stages of its transformation into a global, multi-channel brand with underestimated margin sustainability from its vastly improved inventory management capabilities. He estimates EBIT margin improvement of 150bps to 10% in FY18 versus Bears predicting margins reverting back to 6% and the market is somewhere in the middle. Sole said Children's Place's brand has strengthened more than peers in consumer surveys and said its main rival, Gyboree is in jeopardy of "severe" financial stress. The analyst raised Children's Place price target to $140 from $113 and has a bull case target of $161. Shares are Overweight rated.