Warm Weather Effects Inventory and Sales; Cowen Cuts Price Target on Dick's Sporting Goods (DKS)

Cowen maintained a Market Perform rating on Dick's Sporting Goods (NYSE: DKS), and cut the price target to $43.00 (from $55.00), based on relative valuation. Valuations in the athletic apparel and footwear industry have significantly contracted since October 1st due to elevated inventory positions as a result of weaker sales, partially attributed to warmer than normal weather. DKS provided Q4 SSS guidance of -2% to +1% and EPS $1.10-$1.25, below consensus SSS +1.5% and EPS of $1.42.

Analyst John Kernan commented, "We are lowering our estimates and price target to $43 (13x FY16E EPS) largely based off relative valuation in the group. While we reiterate our Market Perform rating, we see very limited downside to shares given cheap valuation, even on our below consensus estimates through next year. As weather pressure normalizes, gross margin and investor sentiment should stabilize at DKS."

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 $40.81 yesterday.

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