Shoe Stock Steps Higher After Blowout Earnings Report

The stock sports a promising technical setup, too

Digital Content Manager
Aug 31, 2021 at 9:36 AM
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The shares of Designer Brands Inc (NYSE:DBI) are on their way up the charts this morning, last seen up 2.5% at $16.21 after the company's upbeat second-quarter earnings report. Designer Brands posted profits of 56 cents per share on $817.34 million in revenue, topping Wall Street's estimates. The footwear retailer also reported an 84.9% jump in same-sales for the second-quarter, which also easily topped estimates.. 

Analysts have yet to chime in, though there's plenty of room for upgrades. Of the six in coverage, five consider DBI a tepid "hold," compared to one "buy." Meanwhile, the stock sports a 12-month consensus target price of $20.75, which is a 24.3% premium to last night's close. 

Short sellers were hitting the exits ahead of today's earnings event. Short interest dropped 5.4% in the most recent reporting period. A further unwinding of these shorts could put additional wind at the equity's back, as the 7.33 million shares sold short make up 12.7% of the stock's available float, and would take over a week to cover at DBI's average daily pace of trading. 

The DSW parent's technical setup looks promising too. The security just blew past pressure at it 50-day moving average, which now looks to be providing support on the chart, while the 200-day moving average helped contain the stock's pullback from its May 18 two-year peak of $20.48. Plus, year-over-year, DBI is up over 106%. 

 

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