Designer Brands Stock Rises 2.8% After UBS Analyst Raises Price Target to $4.00

Designer Brands (DBI) stock is up 2.8% after UBS analyst Jay Sole raised the price target to $4.00 from $3.00, citing improved fundamentals. The company is expected to report earnings on September 9, and the consensus EPS estimate has been revised 53.3% higher over the last 30 days. Designer Brands is down 11.9% YTD and 36.7% below its 52-week high.

Designer Brands Inc. (NYSE: DBI) stock experienced a 2.8% increase after UBS analyst Jay Sole raised the price target for the company to $4.00 from $3.00, citing improved fundamentals [1]. The stock, currently trading at $3.97, has shown strong momentum with a 5.6% gain over the past week, though it remains down 23.7% year-to-date. The investment firm expects Designer Brands to report second-quarter earnings per share in line with market expectations [1].

The UBS analyst noted that Designer Brands' modestly improved fundamentals during the second quarter have already been reflected in consensus earnings estimates. Despite the positive outlook, UBS anticipates Designer Brands will refrain from reinstating its fiscal year 2025 guidance due to ongoing uncertainty regarding tariffs [1]. The company is expected to report solid early third-quarter performance, supported by robust demand during the Back-to-School shopping season [1].

The consensus earnings per share (EPS) estimate for the upcoming earnings report has been revised 53.3% higher over the last 30 days, indicating a significant increase in investor optimism [2]. 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 [2].

Investors who bought $1,000 worth of Designer Brands’ shares 5 years ago would now be looking at an investment worth $624.71 [2]. The options market is pricing in a 12.7% share price movement following the earnings report, exceeding the historical average move of 10.9%, though UBS expects less volatility than what options pricing suggests [1].

In other recent news, Designer Brands Inc. reported disappointing financial results for the first quarter of fiscal year 2025. The company’s earnings per share (EPS) were -$0.26, which was significantly below the forecasted -$0.08. Additionally, revenue for the quarter was $686.9 million, falling short of the expected $736.02 million [1]. These results have raised concerns among investors about the company’s performance and market conditions.

Designer Brands faces challenges in the current economic climate, with ongoing uncertainty regarding tariffs and the impact they have on the company's operations [1]. Despite these challenges, the recent positive adjustments from UBS and the revised consensus EPS estimates suggest that investors are cautiously optimistic about the company's future performance.

References:
[1] https://www.investing.com/news/analyst-ratings/designer-brands-stock-price-target-raised-to-4-by-ubs-on-improved-fundamentals-93CH-4223934
[2] https://finance.yahoo.com/news/why-designer-brands-dbi-stock-161719192.html