Brean Capital Downgrades DSW Inc. (DSW) to Hold, Says Expectations Too High
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Price: $22.51 --0%
Rating Summary:
6 Buy, 18 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
6 Buy, 18 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Brean Capital downgraded DSW Inc. (NYSE: DSW) from Buy to Hold.
The firm comments, "We are stepping to the sideline on DSW and reducing our rating to Hold (from Buy), lowering our above the Street 4QFY13 EPS estimate to $0.65 (from $0.74) and adjusting our FY14 EPS projection to $3.84 (from $3.90), due to the combination of poor retail industry comps, suggesting a weaker-than-anticipated Holiday selling season for the sector, and aftermath from Hurricane Sandy lingering longer than expected which we fear has placed unforeseen pressure on 4Q brick and mortar sales. In addition, given the minimal guidance provided by management, we believe it is necessary to be more conservative in our top-line projections and by doing so, now fall at the low end of management's guided EPS range of $3.30 to $3.40. We view our 17X multiple as appropriate and our revised FY13 EPS estimate of $3.31 leads us to believe DSW is currently fairly valued; we note this is on a cash adjusted basis (net cash/share 3QFY13 of $9.45). That said, we remain upbeat on the multiple growth opportunities set in place for FY14 and anxiously look for the next entry point with a greater risk/reward to get aggressive in the name."
For an analyst ratings summary and ratings history on DSW Inc. click here. For more ratings news on DSW Inc. click here.
Shares of DSW Inc. closed at $67.43 yesterday.
The firm comments, "We are stepping to the sideline on DSW and reducing our rating to Hold (from Buy), lowering our above the Street 4QFY13 EPS estimate to $0.65 (from $0.74) and adjusting our FY14 EPS projection to $3.84 (from $3.90), due to the combination of poor retail industry comps, suggesting a weaker-than-anticipated Holiday selling season for the sector, and aftermath from Hurricane Sandy lingering longer than expected which we fear has placed unforeseen pressure on 4Q brick and mortar sales. In addition, given the minimal guidance provided by management, we believe it is necessary to be more conservative in our top-line projections and by doing so, now fall at the low end of management's guided EPS range of $3.30 to $3.40. We view our 17X multiple as appropriate and our revised FY13 EPS estimate of $3.31 leads us to believe DSW is currently fairly valued; we note this is on a cash adjusted basis (net cash/share 3QFY13 of $9.45). That said, we remain upbeat on the multiple growth opportunities set in place for FY14 and anxiously look for the next entry point with a greater risk/reward to get aggressive in the name."
For an analyst ratings summary and ratings history on DSW Inc. click here. For more ratings news on DSW Inc. click here.
Shares of DSW Inc. closed at $67.43 yesterday.
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