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DSW Stock: Why Most Wall Street Analysts Say ‘Hold’

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Ratings synopsis

Most Wall Street analysts providing a recommendation on DSW (DSW) stock have recommended a “hold” rating. As of January 10, of the 14 analysts covering the stock, 71% recommended a “hold,” and the remaining 29% recommended a “buy.” None have recommended a “sell” rating for DSW.

Following the fiscal 3Q17 results, many analysts have revised their target prices for DSW. While Citigroup upped its price target to $21 from $20, Susquehanna increased it to $24 from $23. On the contrary, Deutsche Bank slashed its target price to $21 from $22, and Wedbush reduced its target price to $19 from $20.

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DSW is a leading footwear and accessories retailer. Like all other traditional retailers, the company is also investing in its online channel as well as leveraging stores to retain market share as the retail landscape changes drastically. However, the company has somewhat faltered with the buyout of online retailer Ebuys, prompting it to write down the carrying value of the acquisition on its balance sheet.

Currently, analysts’ 12-month average target price for DSW stock is $20.92, which reflects a 2.4% upside to the stock price as of January 10.

Peer ratings

Out of 20 analysts covering Foot Locker (FL), 45% have provided a “hold” rating. For Finish Line (FINL), ~67.0% of the 15 analysts covering the stock have provided a “hold” rating. 60% of the analysts have provided a “hold” rating for Shoe Carnival (SCVL).

Currently, analysts’ target price for Foot Locker is $49.29, reflecting a 6.5% upside to the stock price as of January 10. For Finish Line, the mean target price is $12.47, which indicates a 6.3% downside to the stock price as of January 10. For Shoe Carnival, the target price is $28.20, implying a 9% upside to the stock price as of January 10.

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