Janney Montgomery Scott Q2 Review on Dick's Sporting Goods (DKS); Positive Bias, But Wait For Pullback
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Price: $194.55 -3.67%
Rating Summary:
29 Buy, 22 Hold, 1 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 20
Rating Summary:
29 Buy, 22 Hold, 1 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 20
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Janney Montgomery Scott maintains a 'Neutral' on Dick's Sporting Goods (NYSE: DKS) price target of $55.00.
Analyst, Eric Tracy, said, "DKS reported a decent 2Q and raised its full-year guidance, which despite reflecting primarily a flow-through of the quarter lends some level of optimism (early reads on back-to-school encouraging) from an appropriately conservative management team (given macro headwinds), in our view. A lack of meaningful beat against relatively easier compares kept shares under pressure in yesterday's session, with an unseasonably warm spring (recall, DKS same-store-sales +8.4% in 1Q) leading to a pull-forward in the quarter (traffic down ~1% in 2Q)."
Still much to like including: (1) despite a challenging real estate environment, DKS maintains superior intermediate term (38 new stores, or 8% y/y door growth, which could prove conservative) and long term (likely doubling of store base) unit growth characteristics relative to a saturated domestic retail landscape, (2) solid merchandising, strategic partnerships with key vendors (Nike, Under Armour, The North Face) support comps (aided by price increases, 53rd week in FY12), and (3) ongoing investments in systems (planning/allocation, inventory management) should yield improving margins (although potentially tempering SG&A leverage), all of which should translate to consistent 15%+ annual earnings growth. We remain positively biased on the LT thesis, but recommend investors look to get more aggressive on pull-backs.
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 $48.59 yesterday.
Analyst, Eric Tracy, said, "DKS reported a decent 2Q and raised its full-year guidance, which despite reflecting primarily a flow-through of the quarter lends some level of optimism (early reads on back-to-school encouraging) from an appropriately conservative management team (given macro headwinds), in our view. A lack of meaningful beat against relatively easier compares kept shares under pressure in yesterday's session, with an unseasonably warm spring (recall, DKS same-store-sales +8.4% in 1Q) leading to a pull-forward in the quarter (traffic down ~1% in 2Q)."
Still much to like including: (1) despite a challenging real estate environment, DKS maintains superior intermediate term (38 new stores, or 8% y/y door growth, which could prove conservative) and long term (likely doubling of store base) unit growth characteristics relative to a saturated domestic retail landscape, (2) solid merchandising, strategic partnerships with key vendors (Nike, Under Armour, The North Face) support comps (aided by price increases, 53rd week in FY12), and (3) ongoing investments in systems (planning/allocation, inventory management) should yield improving margins (although potentially tempering SG&A leverage), all of which should translate to consistent 15%+ annual earnings growth. We remain positively biased on the LT thesis, but recommend investors look to get more aggressive on pull-backs.
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 $48.59 yesterday.
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