NEW YORK (TheStreet) -- Shares of DSW Inc. are gaining by 1.84% to $36.47 at the start of trading on Friday morning, following a ratings upgrade to "buy" from "hold" at Canaccord Genuity. The firm said it raised its rating on the discount designer shoe retailer based on its expectation that improved trends in fashion will re-accelerate the company's comp sales growth. Canaccord Genuity upped its price target on DSW to $45 from $33. Exclusive Report: Jim Cramer's Best Stocks for 2015 "We believe a multitude of factors are coming together to support a comp re-acceleration in DSW's largest and margin-accretive category, women's footwear," the firm said in an analyst note. "We see 2015 as a year in which comp growth can re-accelerate followed by structural margin improvements that will begin to flow through 2016, thus resulting in sustained mid-high teens EPS growth," Canaccord Genuity added. Separately, TheStreet Ratings team rates DSW INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation: "We rate DSW INC (DSW) a BUY. This is driven by several positive factors, 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 revenue growth, reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. 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: Despite its growing revenue, the company underperformed as compared with the industry average of 7.3%. Since the same quarter one year prior, revenues slightly increased by 7.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share. 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. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.83 is somewhat weak and could be cause for future problems. 35.14% is the gross profit margin for DSW INC which we consider to be strong. Regardless of DSW's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, DSW's net profit margin of 7.39% compares favorably to the industry average. DSW INC's earnings per share declined by 8.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, DSW INC increased its bottom line by earning $1.64 versus $1.60 in the prior year. For the next year, the market is expecting a contraction of 0.6% in earnings ($1.63 versus $1.64). You can view the full analysis from the report here: DSW Ratings Report
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