Dick's Sporting Goods (DKS) Comp Peak Was Likely 3Q - Raymond James
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Raymond James analyst Matthew McClintock reiterated an Underperform rating on Dick's Sporting Goods (NYSE: DKS) on the belief that the 25% since bottoming in mid-August was based on hope that the company can sustainably comp positively north of 3.0% and that with a better topline outlook, operating margin expansion is on the horizon.
The analyst stated "This view has been fueled by DKS’s better than expected +3.2% comp result in 2Q19 as well channel checks indicating this strength has continued into 3Q19. To wit, we believe expectations are for as high of a comp as as 4.5-5.0% for 3Q19 (well above consensus of 2.9%). While we acknowledge current trends could very well be ahead of consensus expectations, we believe that this is largely priced into the stock. Furthermore, we believe 3Q19 likely represents a “top” for comps and that the topline will likely decelerate into 2020 (against sequentially toughening compares), thus creating a very difficult setup post the quarter".
Shares of Dick's Sporting Goods closed at $39.40 yesterday.
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