NEW YORK (TheStreet) -- Credit Suisse has downgraded Dillard's (DDS - Get Report) to "neutral" from "outperform." Analysts justified the ratings revision as a valuation call based on a $93 price target.
Separately, TheStreet Ratings team rates DILLARDS INC as a Buy with a ratings score of B+. The team has this to say about their recommendation:
"We rate DILLARDS INC (DDS) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, good cash flow from operations, increase in stock price during the past year and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has slightly increased to $328.70 million or 8.54% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -4.70%.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- DILLARDS INC's earnings per share declined by 19.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, DILLARDS INC increased its bottom line by earning $7.13 versus $6.89 in the prior year. This year, the market expects an improvement in earnings ($7.93 versus $7.13).
- The current debt-to-equity ratio, 0.41, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.34 is very weak and demonstrates a lack of ability to pay short-term obligations.
- You can view the full analysis from the report here: DDS Ratings Report