Brown Shoe shares could trade at $20 in 12 mos-Barron's

NEW YORK, July 20 (Reuters) - Brown Shoe Co Inc (BWS.N: Quote, Profile, Research, Stock Buzz)shares could start rising this year and hit $20, about 33 percent above last week's close, Barron's said on Sunday.

The company's stock has been trampled by investors fleeing a consumer-led recession, but it has a healthy balance sheet and even, unlike most footwear companies, a 1.88 percent dividend yield.

Investors widely misperceive the company as a private-label wholesaler. Brown Shoe is not a household name, but many of its brands, including Naturalizer, Dr. Scholl's and Via Spiga, are. The company's footwear tends to be fashionable, yet affordable, and management has posted a strong history of growth.

Chief Executive Ron Fromm said sales and profits could double in the next five years based on store openings, operating efficiencies and expansion in Asia.

Brown Shoe is "on sale" today, given that in the past the market has been willing to pay about 14 times earnings, said Paul Magnuson, lead manager of Allianz NFJ Small-Cap Value Fund, which owns about 4.5 percent of the company's shares outstanding.

Its price/earnings multiple has fallen to just 10.7 times analysts' earnings estimate of $1.39 per share for the current fiscal year. (Reporting by Helen Chernikoff, editing by Maureen Bavdek)