UPDATE: Morgan Stanley Highlights Structural Imbalance at Dick's (DKS) and Cuts Rating to 'Underweight'

Morgan Stanley downgraded Dick's Sporting Goods (NYSE: DKS) from Equalweight to Underweight with a price target of $39, implying downside of 16%. Analyst Simeon Gutman highlighted an imbalance between comps and square footage growth.

Gutman explained, "DKS has among the greatest imbalance between store only comps (-1.4%) and square footage growth (+7.1%) and unless one of these inputs changes, which we do not foresee, ROIC will likely recede over time. This is not a near-term call on the business, but rather a 1-3 year structural view based on our analysis."

For an analyst ratings summary and ratings history on Dick's Sporting Goods click here. For more ratings news on Dick's Sporting Goods click here.

Shares of Dick's Sporting Goods closed at $46.59 yesterday.

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