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Canaccord Genuity Says Dick's Sporting Goods (DKS) Would Benefit From Sports Authority Store Closures - Reiterates Buy

January 21, 2016 9:55 AM EST
Get Alerts DKS Hot Sheet
Price: $223.36 +0.35%

Rating Summary:
    24 Buy, 24 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 13 | Down: 11 | New: 11
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Canaccord Genuity reiterated a Buy rating and $48.00 price target on Dick's Sporting Goods (NYSE: DKS) after news of Sports Authority's missed $20M interest payment last Friday. The missed payment sparked debate over who would stand to benefit if TSA were to close stores. Should TSA close stores in a trade area in which DKS operates, Canaccord would expect a majority of those sales to transfer to DKS over time.

Analyst Camilo Lyon commented, "News of Sports Authority's missed $20M interest payment last Friday has sparked a debate around potential store closures and who would stand to benefit. Should TSA close stores, ostensibly DKS would be the most direct beneficiary as its chief competitor would be crippled. That said, we believe the benefits would come over time as closing stores can be a lengthy process (depending on lease expirations, creditor negotiations, etc). For the exposed brands (e.g. UA, NKE, VFC, COLM), we believe there would be little to no lasting impact as consumer demand for these brands would not diminish, but rather transfer elsewhere (likely DKS). The bottom-line takeaway is that consolidation favors the leader (DKS) over the medium term. More importantly, it should help shift sentiment on the stock to positive now that there is an underlying potential for a positive shift in the competitive dynamic. As such, we reiterate our BUY rating."

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 $36.13 yesterday.



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