On Thursday, CFRA reiterated its Buy rating on Dillard’s Inc. (NYSE:) with a steadfast stock price target of $500.00, reflecting confidence in the company’s financial outlook.
The firm’s valuation is based on a forward price-to-earnings (P/E) multiple of 12.5 times its fiscal year 2025 (ending January) earnings per share (EPS) estimate, which is notably below Dillard’s historical 5-year average forward P/E multiple of 16.4x. CFRA’s EPS projections for fiscal years 2025 and 2026 remain unchanged at $40.00.
Dillard’s recently reported a normalized first-quarter EPS of $11.09, surpassing consensus estimates by $1.91, although it was a slight decline from $11.77 in the same quarter the previous year. The company’s revenue for the quarter stood at $1.55 billion, aligning with estimates but showing a slight decrease from $1.58 billion year-over-year.
Comparable store sales saw a 2% decline from the previous year, while the retail gross margin experienced a 60 basis point expansion, driven by strong performance in home, furniture, ladies accessories, and lingerie sectors.
The analyst highlighted Dillard’s proactive approach to managing market slowdowns through consistent share repurchases. Since fiscal year 2017, Dillard’s has successfully halved its shares outstanding, underscoring its commitment to returning value to shareholders. Additionally, the company distributed a special dividend of $20 per share in fiscal year 2024.
Dillard’s operational performance continues to outshine its competitors, with the analyst expecting the company to sustain an operating margin above 10% over the long term. This confidence is attributed to Dillard’s strategic store count and its strong presence in southern locations.
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The firm’s positive outlook on Dillard’s shares remains unchanged, as it anticipates the retailer to maintain its robust operating metrics going forward.
InvestingPro Insights
InvestingPro data showcases Dillard’s Inc. (NYSE:DDS) as a company with a current market capitalization of $7.27 billion and a Price to Earnings (P/E) ratio of 10.13. This valuation is lower than the forward P/E multiple of 12.5 times projected by CFRA for fiscal year 2025.
Moreover, the company’s P/E ratio has slightly decreased to 9.87 when adjusted for the last twelve months as of Q4 2024. In terms of performance, Dillard’s has demonstrated a significant return over the past year, with a 1-year price total return of 72.38% and a 6-month price total return of 52.93%, indicating strong recent growth in the company’s stock price.
From a financial health perspective, InvestingPro Tips reveal that Dillard’s holds more cash than debt on its balance sheet and has a long-standing history of rewarding shareholders, having raised its dividend for 10 consecutive years and maintained dividend payments for 54 consecutive years. These factors, combined with the company’s ability to cover interest payments with its cash flows, provide investors with confidence in the stability and potential for continued returns.
For those looking to delve deeper into Dillard’s financials and future outlook, InvestingPro offers additional insights and tips. Discover more valuable InvestingPro Tips for Dillard’s by visiting https://www.investing.com/pro/DDS and use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
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