Credit Suisse Raises Price Target on Dick's Sporting Goods (DKS) to $55 Following Strong 2Q
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Credit Suisse reiterated a Neutral rating on Dick's Sporting Goods (NYSE: DKS), and raised the price target to $55.00 (from $48.00), following the company's 2Q earnings report. EPS of $0.82 was ahead of the Street by $0.13 on higher comps and better gross margins. Comps of +2.8% were well above guidance of -4% to -1% and the Street at -2.2%.
Analyst Seth Sigman commented, "DKS delivered much better Q2 results, which should help support the 2H16 and 2017 earnings improvement story. There was evidence that the base business improved, that the early TSA market share gains have started, and that other merchandising and strategic initiatives are progressing. The key risk, in our view, is expectations, which continue to rise, as well as the potential for the company to invest some of the TSA benefits in 2017, putting some of the upside scenarios at risk. That said, the company should have a decent runway for improvement over the next few quarters. Raising our EPS estimate for 2016 to $3.03 (from $2.87) and for 2017 to $3.62 (from $3.47); our TP is now $55 based on 15x our 2017 EPS estimate."
Shares of Dick\'s Sporting Goods closed at $58.76 yesterday.
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