What Happened?
Shares of footwear and accessories discount retailer Designer Brands (NYSE: DBI) jumped 9.9% in the morning session after an analyst from UBS raised the company's price target. On September 4th, UBS analyst Jay Sole increased the price target on the stock to $4.00 from $3.00, representing a significant 33.33% raise, while maintaining a 'Neutral' rating. This positive adjustment from the investment firm comes ahead of the company's earnings report for the quarter that ended in July, which is expected on September 9. Adding to the optimistic sentiment, the consensus earnings per share (EPS) estimate for the upcoming report has been revised 53.3% higher over the last 30 days.
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What Is The Market Telling Us
Designer Brands’s shares are extremely volatile and have had 68 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 8 days ago when the stock gained 4% on the news that the stock traded higher in sympathy with peer company PVH Corp., which reported second-quarter results that beat expectations. PVH announced that its revenue and earnings for the quarter came in above its prior guidance. Furthermore, the apparel company reaffirmed its full-year non-GAAP earnings outlook. The positive results from a significant player in the retail and apparel space likely lifted investor sentiment across the sector, benefiting shares of companies like Designer Brands.
Designer Brands is down 17.4% since the beginning of the year, and at $4.38 per share, it is trading 40.7% below its 52-week high of $7.38 from September 2024. Investors who bought $1,000 worth of Designer Brands’s shares 5 years ago would now be looking at an investment worth $624.71.
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