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Dillard's, Inc. (DDS) Hit a 52 Week High, Can the Run Continue?
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Have you been paying attention to shares of Dillard's (DDS - Free Report) ? Shares have been on the move with the stock up 10.2% over the past month. The stock hit a new 52-week high of $429.15 in the previous session. Dillard's has gained 5.3% since the start of the year compared to the 6.2% move for the Zacks Retail-Wholesale sector and the 0.6% return for the Zacks Retail - Regional Department Stores industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on November 9, 2023, Dillard's reported EPS of $9.3 versus consensus estimate of $6.95.
For the current fiscal year, Dillard's is expected to post earnings of $32.72 per share on $6.73 billion in revenues. Meanwhile, for the next fiscal year, the company is expected to earn $32.19 per share on $6.73 billion in revenues. This represents a year-over-year change of -20.04% and 0.05%, respectively.
Valuation Metrics
Dillard's may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Dillard's has a Value Score of A. The stock's Growth and Momentum Scores are D and F, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 13X current fiscal year EPS estimates, which is a premium to the peer industry average of 11.1X. On a trailing cash flow basis, the stock currently trades at 7X versus its peer group's average of 5.4X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Dillard's currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Dillard's fits the bill. Thus, it seems as though Dillard's shares could have a bit more room to run in the near term.
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Dillard's, Inc. (DDS) Hit a 52 Week High, Can the Run Continue?
Have you been paying attention to shares of Dillard's (DDS - Free Report) ? Shares have been on the move with the stock up 10.2% over the past month. The stock hit a new 52-week high of $429.15 in the previous session. Dillard's has gained 5.3% since the start of the year compared to the 6.2% move for the Zacks Retail-Wholesale sector and the 0.6% return for the Zacks Retail - Regional Department Stores industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on November 9, 2023, Dillard's reported EPS of $9.3 versus consensus estimate of $6.95.
For the current fiscal year, Dillard's is expected to post earnings of $32.72 per share on $6.73 billion in revenues. Meanwhile, for the next fiscal year, the company is expected to earn $32.19 per share on $6.73 billion in revenues. This represents a year-over-year change of -20.04% and 0.05%, respectively.
Valuation Metrics
Dillard's may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Dillard's has a Value Score of A. The stock's Growth and Momentum Scores are D and F, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 13X current fiscal year EPS estimates, which is a premium to the peer industry average of 11.1X. On a trailing cash flow basis, the stock currently trades at 7X versus its peer group's average of 5.4X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Dillard's currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Dillard's fits the bill. Thus, it seems as though Dillard's shares could have a bit more room to run in the near term.