UPDATE - UBS Initiates Coverage on Dick's Sporting Good (DKS) with a Buy; Competing to the Top of the Industry

UPDATE - UBS initiates coverage on Dick's Sporting Good (NYSE: DKS) with a Buy rating. PT $44.

UBS analyst says, "We believe DKS offers a compelling combination of the surety of its unit growth opportunity, sustainable same-store share increases, and substantial room to scale its margin. We recommend buying DKS, as we think it will maintain 15-20% EPS growth for the foreseeable future."

"DKS's unit growth opportunity is a rarity in hardline retail right now. We think the company should be able to maintain a mid-to-high-single-digit rate of square footage growth for at least the next five years...We expect DKS will achieve a 10% EBIT margin by 2013. This would place its earnings power north of $3 only a few years out...Few hardline retailers have the potential to double their store base, given the saturation of most subsectors. Thus, we think DKS will continue to garner a premium multiple as it fulfils its potential of becoming a dominant player in the sporting goods retail category."

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