UBS Raises Price Target on Dick's Sporting Goods (DKS) Despite 4Q Miss

UBS reiterated a Buy rating on Dick's Sporting Goods (NYSE: DKS), and raised the price target to $51.00 (from $42.00), following the company's 4Q earnings report. While the 4Q results that featured a -2.5% comp and a $0.02 EPS miss vs. cons did little to inspire, this was largely anticipated given the uncooperative weather. However, UBS calculates that there are 68 Dick's stores within 5 miles of a Sports Authority store that is closing, and 93 stores within 10 miles of a closing location. In a base case, it is assumed that the closing stores may account for $4.1 mm in sales per location.

Analyst Michael Lasser commented, "There were several important points from DKS' 4Q release. Notably, the stock rallied & finished up 0.5% as the market wants to lift the story out of the “challenged bucket” of retailers into healthier territory. While the 4Q results that featured a -2.5% comp and a $0.02 EPS miss vs. cons did little to inspire, this was largely anticipated given the uncooperative weather. Having this “bad news” out of the way should lift some of the uncertainty. Plus, it sounds like the biz is on better footing, with 0%-1% comp guidance for 1Q. Trends should improve over '16 as comparisons ease & investment initiatives kick in. This should provide a solid base for the shares to move higher, particularly considering they trade at an attractive 13.1x our CY’17 EPS estimate."

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 $44.56 yesterday.

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