Academy Sports & Outdoors Inc. (ASO) PT Raised to $75 at Guggenheim

Guggenheim analyst John Heinbockel raised the price target on Academy Sports & Outdoors Inc. (NASDAQ: ASO) to $75.00 (from $68.00) while maintaining a Buy rating.

The analyst comments "Consistent with other discretionary retailers, ASO shares have rallied meaningfully over the past three months, in anticipation of an improving consumer spending backdrop—this is detailed in Exhibit 1. The ~52% move is in line with these peers and well above the S&P 500’s ~15% gain during this time. However, N-T growth rates are higher while valuation is lower. The former benefits from above-average (8-9%) unit expansion, as the footprint spreads into adjacent and new markets while the latter reflects lingering concerns around the COVID give-back given the YTD comp decline (7.5%) and EBITDA margin erosion (300 basis points). We believe this is fully discounted in still-modest EBITDA and P/E multiples—see Exhibit 2—and raise our PT to $75 from $68, remaining BUY Rated. Though we do not see in-line 4Q operating results and initial 2024 guidance as a catalyst, 1H P&L stabilization may be over the next several months."

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