Carter's (CRI) stock experienced a significant pre-market plunge of 5.46% on Wednesday, following a downgrade from Wells Fargo. The children's apparel retailer's shares came under pressure after the investment bank lowered its rating and substantially cut its price target.

Wells Fargo downgraded Carter's from Equalweight to Underweight, a move that signals a more pessimistic outlook for the company. Additionally, the bank slashed its price target for Carter's stock from $40 to $25, representing a 37.5% reduction. This drastic cut in the price target suggests that Wells Fargo analysts have concerns about Carter's near-term prospects and overall valuation.

The downgrade comes at a time when Carter's has been offering a high dividend yield of 9.44%, according to recent market data. However, investors should note that high yields can sometimes indicate underlying issues with a company's financial health or future growth prospects. The market's reaction to the downgrade highlights the significant influence that analyst opinions can have on stock prices, particularly in pre-market trading when liquidity is typically lower.