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By Sam Boughedda
Investing.com — Fashion retailer Dillard's (NYSE:DDS) has seen its shares fall in reaction to the news that UBS has initiated the stock with a sell rating, setting a price target 44% below the current share price.
Analyst Mauricio Serna set the price target at $190 after Dillard's shares finished Monday at $339.92. Heading into Tuesday's close, they are currently trading around the $275.64 mark, down around 19%.
"We think the market underestimates the pressure on DDS earnings due to tough FY22 compares and macro headwinds," said Serna.
The analyst said that Dillard's, one of the largest U.S. department stores, will continue losing market share against other retailers, with 2021 marking an earnings peak and Serna forecasting a 22% drop in the EPS compound annual growth rate over the next four years.
"Our FY22 EPS estimate is -28% below consensus. We expect EPS misses post FY21 will weigh on sentiment," explained the analyst.
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