How Analysts Are Rating DSW after Its Fiscal Q2 2018 Results

Rating synopsis

Of the 12 analysts covering DSW (DSW) stock on August 28, 67.0% recommended a “hold” rating. Another 25.0% recommended a “buy” rating, and the remaining 8.0% rated it as “sell.”

Following DSW’s better-than-expected fiscal second-quarter results, Susquehanna raised its price target to $25.00 from $22.00. We expect more changes in the coming days.

How Analysts Are Rating DSW after Its Fiscal Q2 2018 Results

As we discussed earlier in this series, DSW’s revenues of $795.3 million and adjusted EPS of $0.63 topped analysts’ projections of $689.4 million and $0.46, respectively. On a year-over-year basis, these metrics registered growth of 16.4% and 65.8%, respectively.

DSW also raised its guidance for its adjusted EPS and revenues for fiscal 2018. Going forward, DSW remains confident about the kid’s footwear category expansion and expects its Canada business to prove accretive to the top line.

Currently, the analysts’ 12-month average target price for DSW stock is $27.45, which reflects a 16.1% downside to its stock price on August 28.

Ratings for DSW’s peers

Of the 23 analysts covering Foot Locker (FL), 52.0% gave it a “buy” rating while 35.0% gave it a “hold” rating. Currently, analysts’ target price for FL stock is $55.55, reflecting a 15.2% upside to the stock price on August 28.

For Shoe Carnival (SCVL), two of the four analysts covering the stock recommended a “hold” rating while the other two rated it as a “buy.” The mean target price for SCVL stock is $37.00, which indicates a 0.2% upside.

For Boot Barn Holdings (BOOT), six of the eight analysts covering the stock recommended a “buy” rating while the other two rated it as a “hold.” The mean target price is $28.63, which indicates a 0.2% downside.

PE valuation overview

On August 28, DSW was trading at a 12-month forward PE (price-to-earnings) ratio of 19.1x. Following its fiscal second-quarter results, DSW’s valuation multiple has increased 17.4%.

Foot Locker, Shoe Carnival, and Boot Barn Holdings were trading at 12-month forward PE ratios of 10.3x, ~17.0x, and 23.3x, respectively.