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Dillard's (DDS) Stock Sinks As Market Gains: What You Should Know

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Dillard's (DDS - Free Report) closed the most recent trading day at $254.43, moving -0.22% from the previous trading session. This move lagged the S&P 500's daily gain of 0.28%. Elsewhere, the Dow gained 0.11%, while the tech-heavy Nasdaq added 0.14%.

Heading into today, shares of the department store operator had gained 0.3% over the past month, outpacing the Retail-Wholesale sector's loss of 3.84% and the S&P 500's gain of 0.12% in that time.

Dillard's will be looking to display strength as it nears its next earnings release. On that day, Dillard's is projected to report earnings of $8.75 per share, which would represent year-over-year growth of 155.1%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.02 billion, up 28.38% from the year-ago period.

DDS's full-year Zacks Consensus Estimates are calling for earnings of $31.91 per share and revenue of $6.49 billion. These results would represent year-over-year changes of +1268.86% and +50.83%, respectively.

It is also important to note the recent changes to analyst estimates for Dillard's. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Dillard's currently has a Zacks Rank of #3 (Hold).

Digging into valuation, Dillard's currently has a Forward P/E ratio of 7.99. This valuation marks a premium compared to its industry's average Forward P/E of 6.7.

Meanwhile, DDS's PEG ratio is currently 0.55. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Retail - Regional Department Stores industry currently had an average PEG ratio of 0.55 as of yesterday's close.

The Retail - Regional Department Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 2, which puts it in the top 1% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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