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Shoe Carnival (SCVL) Soars to 52-Week High, Time to Cash Out?

Air Products' (APD) latest deal will see a boost in helium feedstock and addition of two new air separation plants.

Have you been paying attention to shares of Shoe Carnival (SCVL)? Shares have been on the move with the stock up 11.8% over the past month. SCVL hit a new 52-week high of $36.33 in the previous session. Shoe Carnival has gained 32.2% since the start of the year compared to the 17.2% move for the Zacks Retail-Wholesale sector and the 9.1% return for the Zacks Retail - Apparel and Shoes 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 May 24, 2018, Shoe Carnival reported EPS of $0.83 versus consensus estimate of $0.75.

For the current fiscal year, Shoe Carnival is expected to post earnings of $2.08 per share on $1.02 billion in revenues. This represents a 39.6% change in EPS on a -0.22% change in revenues. For the next fiscal year, the company is expected to earn $2.28 per share on $1.03 billion in revenues. This represents a year-over-year change of 9.62% and 0.99%, respectively.

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Valuation Metrics

Shoe Carnival may be at a 52-week high right now, but what might the future hold for SCVL? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.

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.

Shoe Carnival has a Value Score of B. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of A.

In terms of its value breakdown, the stock currently trades at 17X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 12.4X versus its peer group's average of 10.8X. 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 look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Shoe Carnival 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 Shoe Carnival passes the test. Thus, it seems as though SCVL shares could have potential in the weeks and months to come.

How Does Shoe Carnival Stack Up to the Competition?

Shares of Shoe Carnival have been rising, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also looking good, including Buckle, (BKE), DSW (DSW), and Urban Outfitters (URBN), all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.

The Zacks Industry Rank is in the top 24% of all the industries we have in our universe, so it looks like there are some nice tailwinds for SCVL, even beyond its own solid fundamental situation.


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Shoe Carnival, Inc. (SCVL) : Free Stock Analysis Report
 
Urban Outfitters, Inc. (URBN) : Free Stock Analysis Report
 
DSW Inc. (DSW) : Free Stock Analysis Report
 
Buckle, Inc. (The) (BKE) : Free Stock Analysis Report
 
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