Join        Login             Stock Quote

DSW (DSW) Reduced To 'Hold' By Brean Capital On Too High Expectations

 January 07, 2013 01:31 PM

(By Balachander) DSW Inc. (NYSE: DSW) shares were reduced to "hold" from "buy" by Brean Capital LLC due to the combination of poor retail industry comps and aftermath from Hurricane Sandy lingering longer than expected.

The brokerage also lowered its above the Street 4QFY13 EPS estimate to $0.65 from $0.74 and adjusted FY14 EPS projection to $3.84 from $3.90.

Brean Capital wrote that the combination of poor retail industry comps suggested a weaker-than-anticipated Holiday selling season for the sector.

The aftermath from Hurricane Sandy lingering longer than expected has placed unforeseen pressure on 4Q brick and mortar sales, the brokerage said.

[Related -Hewlett-Packard Company (HPQ) Put Options In Focus]

"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," Brean Capital said.

"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)," the brokerage added.

That said, Brean Capital remains 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.

DSW, a branded footwear and accessories retailer, operated 364 stores in 41 states, the District of Columbia and Puerto Rico as of December 24, 2012.

[Related -Stock Upgrades And Downgrades: AOL, APOL, CLF, DSW, GIS, VMW, VPHM]

The stock, which has been trading in the 52-week range of $42.18 to $72.00, retreated 3.60 percent to trade at $65.00 on Monday.

iOnTheMarket Premium


Post Comment -- Login is required to post message
Alert for new comments:
Your email:
Your Website:

rss feed

Latest Stories

article imageSavings Glut and Financial Imbalances

Martin Wolf in today's Financial Times discusses the reasons for low interest rates and suggests some read on...

article imageA Dividend Aristocrat Is Now On Sale

The bear market investors have been dreading is already here for many individual stocks. While the S&P 500 read on...

article imageTwo Picks to Play Defense in a Slowing Economy

Is the economy slowing? Last Thursday the Institute for Supply Management (ISM) reported that its read on...

article imageUS Jobless Claims Fall, Moving Closer To Multi-Decade Low… Again

US jobless claims continue to cast a positive glow on the outlook for the labor market. Today’s weekly read on...

Popular Articles

Daily Sector Scan
Partner Center

Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.