DSW Upgraded to Strong Buy - Analyst Blog
January 28 2013 - 9:10AM
Zacks
On Jan 25, 2013, Zacks Investment
Research upgraded DSW Inc. (DSW) to a Zacks Rank
#1 (Strong Buy). The company has amassed a solid return of roughly
45.5% over the past one year.
Why the
Upgrade?
DSW has been witnessing rising
earnings estimates on the back of robust third-quarter fiscal 2012
results and a sturdy outlook for fiscal 2012. Moreover, this
leading footwear and accessories retailer has outperformed the
Zacks Consensus Estimate in 7 straight quarters by an average of
11.9%.
The company declared impressive
third-quarter results on Nov 20, 2012, wherein earnings of $1.02
per share surpassed the Zacks Consensus Estimate of 89 cents by
14.6% and increased 15.9% from 88 cents earned in the prior-year
quarter buoyed by top-line growth. Net sales rose 11.7% year over
year to $592.7 million, and came ahead of the Zacks Consensus
Estimate of $588 million. Comparable sales climbed 6.3%.
Robust top-line performance,
healthy operating margin, rational store expansion strategy, strong
financial position and a solid fiscal 2012 guidance justify the
stock’s Zacks Rank.
Based on its strong fundamentals,
management anticipates fiscal 2012 earnings between $3.30 and $3.40
per share.
The Zacks Consensus Estimate for
fiscal 2012 rose 2.1% to $3.38 per share over the last 90 days, and
has a close proximity with the upper end of the company’s guidance
range. For fiscal 2013, the Zacks Consensus Estimate advanced 2.1%
over the same timeframe to $3.87 per share.
Other Stocks to
Consider
Other stocks in the retail apparel,
shoe sector that you could consider are Citi Trends,
Inc. (CTRN) and Destination Maternity
Corporation (DEST), both of which hold a Zacks Rank #1
(Strong Buy), and are expected to continue with their upbeat
performances. Another stock that should be merited is
Abercrombie & Fitch Co. (ANF), which holds a
Zacks Rank #2 (Buy) and is expected to continue with its positive
earnings surprise trend.
ABERCROMBIE (ANF): Free Stock Analysis Report
CITI TRENDS INC (CTRN): Free Stock Analysis Report
DESTINATION MTR (DEST): Free Stock Analysis Report
DSW INC CL-A (DSW): Free Stock Analysis Report
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