Ahead of the Bell: DSW

NEW YORK (AP) -- Another analyst is raising her rating on DSW in part to the discount shoe company's appealing stock price.

Citi Investment Research's Kate McShane boosted DSW Inc. to "Buy" from "Neutral" and raised its price target to $74 from $72. The actions come just a few days after Credit Suisse analyst Seth Sigman lifted DSW to "Outperform" from "Neutral" and increased its price target to $73 from $70.

In a client note, McShane said that she's liked DSW's fundamentals since October, but was waiting for a more attractive stock price. The company's stock is down 3.6 percent for the year to date. Its shares finished at $63.36 on Tuesday.

McShane said that DSW has a strong management team and is poised for strong growth in its square footage. The analyst said that the retailer has 364 stores to date and expects to add 28 to 30 stores in 2014. Its long-term goal is 450 stores. McShane estimates DSW will have 6 percent to 7 percent square footage growth a year over the next three years, compared with its peers at approximately 3.5 percent growth.

The analyst also said that accessories and private brands are going to make up even more of DSW's business. While private brands currently comprise 11 percent of total sales and accessories make up 7 percent, McShane said that this could rise to a combined 22 percent to 25 percent of total sales over the next several years. The analyst said that every 1 percent increase adds approximately 2 cents to DSW's earnings per share.