What Analysts Recommend for DSW after Mixed Fiscal 4Q17 Results

Rating summary

As of March 14, 2018, most of the analysts that covered DSW (DSW) maintained a “hold” rating on the stock. Of the 14 analysts covering DSW stock, 71.0% recommended a “hold,” and 29.0% recommended a “buy.”

After the company’s results announcement, Susquehanna and Canaccord Genuity revised their price targets for DSW. Susquehanna slashed its price target to $26.00 from $29.00, whereas Canaccord Genuity increased it to $22.00 from the $20.00 projected previously. We can expect more changes in the coming days.

What Analysts Recommend for DSW after Mixed Fiscal 4Q17 Results

As discussed earlier, DSW reported fiscal 4Q17 results on March 13, 2018. The company’s revenue of ~$720 million missed analysts’ estimate of $728.2 million, but the adjusted EPS of $0.38 beat the analysts’ projection of $0.27. On a year-over-year basis, both the metrics registered growth of 6.7% and 90%, respectively

Currently, the analysts’ 12-month average target price for the company is $22.23, which reflects a 4.4% upside to its stock price on March 14, 2018.

Where do peers stand?

Of the 22 analysts covering Foot Locker (FL), 32.0% gave it a “hold” rating, while 59.0% gave it a “buy” rating. For Shoe Carnival (SCVL), 60.0% of all the analysts covering the stock recommended a “hold” rating while 40.0% rated it a “buy.” For Finish Line (FINL), ~13.0% of the 16 analysts covering the stock recommended a “buy” rating while 63.0% rated it as a “hold.”

Currently, analysts’ target price for Foot Locker is $51.60, reflecting a 19.3% upside to the stock price as of March 14, 2018. Shoe Carnival’s mean target price is $28.60, which indicates a 23.4% upside to its stock price as of March 14, 2018. Finish Line’s mean target price is $12.44, which indicates a 21.8% upside to its stock price as of March 14, 2018.

Valuation overview

On March 14, 2018, DSW was trading at a 12-month forward PE (price-to-earnings) ratio of 13.1x. Following fiscal 4Q17 results, the valuation multiple for DSW has increased 9.1%.

In comparison, Foot Locker, Finish Line, and Shoe Carnival were trading at 12-month forward PE ratios of 9.6x, 13.4x, and 12.4x, respectively, on March 14, 2018.