The firm also maintained its "overweight" rating.
DSW is a footwear and accessories retailer based in Columbus, OH.
The higher price target comes as footwear trends have begun to improve following a challenging 2015, Keybanc said.
"Compelling newness, easier compares, cleaner industry inventory levels and more encouraging commentary on early spring selling leave us incrementally more upbeat on the overall footwear industry," the firm wrote in an analyst note.
A combination of warmer weather, new spring fashion and receipt of delated tax refunds has likely driven a recovery in consumer demand for footwear, according to Keybanc.
"While DSW's more aggressive measures to protect market share will weigh on margins, we find valuation compelling and expect top-line trends to improve in 2016," the firm added.
Shares of DSW closed at $26.97 on Monday.
Separately, TheStreet Ratings Team has a "Hold" rating with a score of C on the stock.
The primary factors that have impacted the rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks.
The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures.
As a counter to these strengths, the team also finds weaknesses including deteriorating net income, poor profit margins and disappointing return on equity.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: DSW