Barclays Downgrades KinderCare Learning Companies (KLC) to Equalweight

Barclays analyst Manav Patnaik downgraded KinderCare Learning Companies (NYSE: KLC) from Overweight to Equalweight with a price target of $9.00 (from $20.00).

The analyst comments: "KLC’s poor start as a public company is evident in its -45% YTD performance (vs. SPX/BFAM +10%/+7%); and unfortunately 2Q25 last night was no different. Further weakness in enrollment and utilization (in the core ECE business); and slight misses across other key metrics hasn't inspired confidence and is why we are downgrading to EW (with last nights miss - more below, the final straw for us). While it is admittedly hard to argue for further de-rating (KLC currently trades at 5-6x EBITDA and LDD P/E); a) the multiple is likely impaired (or at least range bound for some time); b) catalysts to drive materially higher numbers is low; and c) the path to rebuild confidence is likely a very long one; and d) the ~37% (of revenues) government exposure will always be a debated point in a noisy macro/DOGE. Hence our preference to stay on the sidelines and we lower our PT to $9."

For an analyst ratings summary and ratings history on KinderCare Learning Companies click here. For more ratings news on KinderCare Learning Companies click here.

Shares of KinderCare Learning Companies closed at $9.81 yesterday.

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