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Dillard's Analyst Says Retailer's Markdown Trends Stabilizing

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Dillard's Analyst Says Retailer's Markdown Trends Stabilizing

Recent promotional data indicates a stabilization in markdown trends at Dillard's, Inc. (NYSE: DDS), with promotions during the July 4 holiday being similar to last year’s levels, according to Wedbush.

The Analyst

Jen Redding upgraded Dillard's from Underperform to Neutral and raised the price target from $54 to $62.

The Thesis

Data for April through June indicated an upturn in promotions, which had “rendered us cautious on shares,” Redding said a Thursday note. (See her track record here.) 

More recent promotional data indicated a stabilization in markdown trends, the analyst said. 

While promotions seem to have stabilized, search trends indicate an upswing in demand of around 740 bps in June versus May, and early July data is even stronger, Redding said. 

Dillard's has also seen increased Form 4 insider purchasing, she said. 

Dillard’s stock has lost 18% since mid-April, and its valuation seems fair, the analyst said.

Wedbush raised its full-year total sales estimate from $1.433 billion to $1.5 billion, ahead of the consensus expectations of $1.481 billion, and the EPS estimate from $4.87 to $5.22 versus a $5.12 consensus forecast.

Price Action

Dillard's shares were trading higher by 5.94% at $64 at the time of publication Thursday. 

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Latest Ratings for DDS

DateFirmActionFromTo
Jan 2020Odeon CapitalInitiates Coverage OnSell
Nov 2019WedbushMaintainsNeutral
Aug 2019Deutsche BankMaintainsSell

View More Analyst Ratings for DDS
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Posted-In: Jen Redding retail WedbushAnalyst Color Upgrades Price Target Analyst Ratings

 

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