Will This Upgrade Help DSW Stock Today? (Update)

Update (9:40 a.m.): Updated with Wednesday market open information.

NEW YORK (TheStreet) -- Brean upgraded DSW  (DSW) to "hold" from "sell." The firm cited valuation and noted the stock is already pricing in a lot of bad news.

The stock was up 1.46% to $37.35 at 9:38 a.m. on Wednesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

----------

Separately, TheStreet Ratings team rates DSW INC as a "buy" with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate DSW INC (DSW) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, increase in net income, reasonable valuation levels and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • DSW has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.28, which illustrates the ability to avoid short-term cash problems.
  • DSW INC's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, DSW INC increased its bottom line by earning $1.64 versus $1.60 in the prior year. This year, the market expects an improvement in earnings ($1.92 versus $1.64).
  • The net income growth from the same quarter one year ago has exceeded that of the Specialty Retail industry average, but is less than that of the S&P 500. The net income increased by 3.5% when compared to the same quarter one year prior, going from $27.15 million to $28.11 million.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 6.6%. Since the same quarter one year prior, revenues slightly dropped by 3.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • You can view the full analysis from the report here: DSW Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

If you liked this article you might like

Analyst Bets There's a 75% Chance Finish Line Will Sell Out to U.K.

Jackson Hole and a Solar Eclipse -- Week in Review

DSW Heading Toward a Major Breakout: Chart