Dick’s Sporting Goods: Hold Rating with Balanced Risk/Reward Amid Modest Growth Expectations

In a report released today, Paul Lejuez from Citi maintained a Hold rating on Dick’s Sporting Goods (DKS – Research Report), with a price target of $220.00.

Paul Lejuez has given his Hold rating due to a combination of factors surrounding Dick’s Sporting Goods’ financial outlook. In his analysis, he notes that while the company is likely to exceed consensus sales estimates for the first quarter, with predicted comparable store sales (comps) growth of 3.0%, it may fall short on earnings per share (EPS) due to increased selling, general, and administrative (SG&A) expenses, as well as higher pre-opening costs. Lejuez anticipates the management will uphold its full-year EPS guidance, which supports a stable but not overly optimistic view of the company’s performance going forward.
Despite Dick’s Sporting Goods’ strong position in the athletic and sporting goods sector and their access to in-demand brands, the stock’s recent price increase means that investor expectations are high, indicating a balanced risk/reward at its current valuation. Lejuez’s forecast includes an adjustment to the company’s EPS estimates based on higher SG&A and the effect of store openings concentrated in the first quarter. He maintains the target price, which suggests a moderate enterprise value to EBITDA multiple, reflecting his expectation of modest EBIT margin expansion and SG&A leverage in fiscal year 2024.

In another report released on May 6, Loop Capital Markets also maintained a Hold rating on the stock with a $200.00 price target.

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Dick’s Sporting Goods (DKS) Company Description:

Dick’s Sporting Goods, Inc. engages in the retail of extensive assortment of authentic sports equipment, apparel, footwear, and accessories through a blend of associates, in-store services, and unique specialty shop-in-shops. The company was founded by Richard T. Stack in 1948 and is headquartered in Coraopolis, PA.