Citi analysts have raised their core NPAT estimates for Baby Bunting Group by 2% to 24%.

They cite better-than-expected sales in June and cost-out initiatives as reasons for the increase.

Citi also upgraded the rating to “neutral” from “sell”, with a new price target of A$1.65.

The company’s cost-out of A$6-8 million was considered a positive surprise, but the benefits might be offset by the cost of new stores and potential inflation.