Sterne Agee CRT Cuts Price Target on DSW, Inc. (DSW) Following 2Q15 Earnings

Sterne Agee CRT maintained a Buy rating on DSW Inc. (NYSE: DSW), and cut the price target to $39.00 (from $45.00), following the company's 2Q15 earnings results. DSW reported 2Q15 SSS increase of 1.8% versus consensus estimate of +3.5%. Management noted that the later Labor Day this year, as well as the shift in tax-free holidays, shifted some sales from 2Q to 3Q. However, analyst Sam Poser said that the big picture is that the underlying business is improving nicely, and improvements and efficiencies will only continue as DSW rolls out its order routing system later in 2015 and assortment planning in 2016.

Analyst Sam Poser commented, "Maintaining Buy rating as DSW is now running a much cleaner and healthier business than in years past and the high end of management's guidance is achievable. Investors are disappointed with SSS in 2Q but are missing the bigger picture; the underlying business is improving nicely. Improvements and efficiencies will only continue as DSW rolls out its order routing system later in 2015 and assortment planning in 2016. We expect 2H15 acceleration as fashion trends continue to improve. Current valuation is compelling, with the stock is trading at ~13X 2016E EPS and ~5X 2016E EBITDA. The company has $5.25 of net cash and long term investments per share, which may be utilized for inorganic growth and/or share repurchases."

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 $30.87 yesterday.

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