27% profits every 20 days?
This is what Nic Chahine averages with his options buys. Not selling covered calls or spreads... BUYING options. Most traders don't even have a winning percentage of 27% buying options. He has an 83% win rate. Here's how he does it.
Dillard's is set to benefit from rising oil costs as a result of its high exposure to energy-dependent states, according to Bank of America Merrill Lynch.
The Analyst
BofA's Heather Balsky upgraded Dillard's, Inc. (NYSE:DDS) from Underperform to Buy and raised the price target from $60 to $89.
The Thesis
Same-store sales are expected to grow meaningfully on improved consumer demand, Balsky said. The analyst cited the company’s free shipping policy on orders over $150 and focus on adding new brands as comp drivers. (See the analyst's track record here.)
Perhaps most surprising to investors, Balsky also highlighted the energy sector's strength in recent months.
“We think weakness in energy markets when oil prices dropped hurt sales,” she said in a Monday note.
Dillard’s has a large presence in Texas and Oklahoma — regions significantly impacted by trends in the energy markets — and “strong ties with the southern consumer," the analyst said.
Ongoing trends in energy should continue to be a tailwind, Balsky said. Retail sales in Texas are up over 7 percent over the past 12 months.
One point of concern for Dillard's investors: continued inventory growth during the first quarter. Inventory growth of 3.9 percent was 290 basis points worse than the analyst had forecast. That said, “it’s in much better shape than it was in early 2016 and 2017,” Balsky said, adding that growing consumer demand should help to minimize the impact of promotions.
Price Action
Dillard's shares were up 4.56 percent midday Monday at $81.
Related Links:
5 Analysts On Q1 Retail Earnings
Credit Suisse Goes Shopping For Discount Retail Winners
Photo by Zereshk/Wikimedia.
27% profits every 20 days?
This is what Nic Chahine averages with his options buys. Not selling covered calls or spreads... BUYING options. Most traders don't even have a winning percentage of 27% buying options. He has an 83% win rate. Here's how he does it.
ENTER TO WIN $500 IN STOCK OR CRYPTO
Enter your email and you'll also get Benzinga's ultimate morning update AND a free $30 gift card and more!