What happened
Shares of Designer Brands (DBI +1.31%) were soaring 32% in morning trading Monday on no discernable news specific to the footwear specialist.
So what
The market itself was largely flat in early trading, with the major indexes up or down less than a percentage point, making Designer Brands' movement all the more notable.
Image source: Getty Images.
There have been several stocks such as GameStop and Bed Bath & Beyond that have seen their shares go stratospheric as short-sellers raced to cover their positions, but it's not necessarily what's happening here.
Around 16% (or some 7.35 million shares) of Designer Brands stock is sold short, but the short interest ratio, or the number of days it would take short-sellers to cover their position, is just 3.6, which wouldn't suggest a short squeeze was imminent (anything over seven days is considered a lot).
Now what
Analysts have started turning bullish on the shoe designer with the IPOs of several online retailers, like Poshmark, fueling interest, and last Thursday an analyst at Deutsche Bank raised his price target on the stock to $12 from $7 per share. He believes the COVID-19 pandemic forced retailers like Designer Brands to make hard decisions about organizational structure, real estate, and the pace of digital investments, which should benefit them as the economy reopens more.
Designer Brands, for example, is leaning heavily into athletic shoes as home fitness became a massive trend during the lockdowns.
