Seaport raises Shoe Carnival stock target, maintains Buy rating

Seaport Global Securities has adjusted its outlook on Shoe Carnival (NASDAQ: NASDAQ:SCVL), increasing the price target to $50 from the previous $42, while retaining a Buy rating on the stock.

The adjustment comes ahead of the company's second quarter 2024 report, scheduled for release on Thursday, September 5th.

The firm noted that Shoe Carnival (NYSE:CCL) had expressed satisfaction with its initial second-quarter performance during the first quarter report on May 23rd, albeit with caution regarding the remainder of the quarter, particularly the critical back-to-school period.

According to data from Bloomberg Second Measure, Shoe Carnival's sales growth in the second quarter, based on a 4-5-4 calendar comparison, surpassed that of the first quarter. Additionally, early indicators suggest the third quarter is shaping up to be stronger than the second.

Despite a slower-than-anticipated start to the back-to-school season, recent weeks have seen an uptick in momentum. This trend, coupled with a solid beginning to the third quarter, is expected to support the company's forecast for a robust second half of the fiscal year 2024.

Seaport Global anticipates that second-quarter results will align with Shoe Carnival's conservative estimates and that the improved back-to-school performance will likely lead to a reaffirmation of the full-year guidance.

In other recent news, Shoe Carnival declared a quarterly cash dividend of $0.135 per share, marking the 49th consecutive quarter of such dividends. The dividend is expected to be paid on July 22, 2024, to shareholders on record as of July 8, 2024.

The company's CEO, Mark Worden, attributed this ongoing return to shareholders to Shoe Carnival's consistent cash flow and debt-free status, underlining the company's robust capital and liquidity management.

Worden also hinted at the company's ambition to become the nation's top family footwear retailer, suggesting that the company's financial health could support growth strategies and further increase shareholder value.

However, he noted that future dividend declarations would be subject to the Board of Directors' approval and would depend on factors such as Shoe Carnival's operational results and prevailing business conditions.

InvestingPro Insights

As Shoe Carnival (NASDAQ: SCVL) approaches its second quarter 2024 earnings report, the company’s financial health and stock performance are under investor scrutiny. Recent data from InvestingPro underscores the company's financial position and market performance. Shoe Carnival boasts a market capitalization of approximately $1.18 billion, and its price-to-earnings (P/E) ratio stands at 16.04, which adjusts slightly to 15.77 when considering the last twelve months as of Q1 2025. This valuation metric is complemented by a price-to-book ratio of 1.98.

InvestingPro Tips highlight that Shoe Carnival has a history of dividend reliability, with a 10-year streak of raising dividends and maintaining payments for 13 consecutive years. This consistency is likely to be reassuring to investors seeking stable income streams. Additionally, the company’s cash flows have been sufficient to cover interest payments, indicating financial resilience. An InvestingPro Tip also notes that the company is trading near its 52-week high, reflecting strong market confidence, which may be a contributing factor to Seaport Global Securities' price target adjustment.

For readers looking to delve deeper into Shoe Carnival's prospects, InvestingPro offers additional tips. These tips include insights into earnings revisions, debt levels, and liquidity, which can provide a more nuanced view of the company's financial health and future performance. To explore these insights further, visit https://www.investing.com/pro/SCVL for a comprehensive list of additional InvestingPro Tips.

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