Brown Shoe (NYSE:BWS) Could Use Stronger Profitability in Core Business

Susquehanna maintains their "Neutral" rating on Brown Shoe Co. (NYSE:BWS), while also raising their earnings and price target estimates.

Even so, to improve their rating Susquehanna said they would need to see better profits in their core business.

"Solid FY10 guidance with FY11 EPS of $1.31-$1.43 vs. consensus of $1.14, with most of the delta from non-recurrence of one-time step-up in incentive compensation and anomalous freight costs. We would like to see greater improvement in the profitability of the core businesses, given that FY10 operating margins remain 170 bps below pre-recession level," said Susquehanna.

EPS estimates for full year 2010 were raised to $0.92 from $0.85 and to $1.35 from $1.05 for full year 2011.

Susquehanna has a price target of $16 on them, raising it from $13.