DBI - Designer Brands: Hold Off Until The Recent Retail Rally Fades Away

• Designer Brands' shares are currently overvalued. The company is having a disastrous fiscal 2020, with the first half year of 2021 forecasted to be poor as well.
• Its balance sheet is under stress due to acquisitions, share repurchases, and pandemic-related sales declines.
• The second half of 2021 should be better for Designer Brands as demand for their main product segments should recover.
• In this article, I argue that shares are currently overvalued. Investors should wait for a pullback in the next six months to $4-7 a share to take a position.
• In the second half of 2021 and beyond I argue that Designer Brands will perform well as its recent acquisitions and business transformation will create growing sales and growing profits.

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