UBS Reiterates Buy Rating on Dick's Sporting Goods (DKS) Following 1Q
UBS maintained a Buy rating and $53.00 price target on Dick's Sporting Goods (NYSE: DKS) following the company's 1Q earnings report.
Analyst Michael Lasser commented, "While the sporting goods sector has been under pressure lately, DKS 1Q showed it is clearly ahead of the pack. Its 1Q comps grew 0.5% and accelerated 60 bps on a 2-yr stack. The retail environment was likely sluggish in April (JCP, M, TGT reported a slowdown). Further, there was some inventory clearance activity in a few TSA locations during the Q. However, DKS was able to manage through all these headwinds and still grow its comp. Its categories of strength included outdoor and footwear, though apparel saw some decline. Notably, Golf Galaxy comped up 1.7% (its first positive comp in 13 Qs). Looking ahead, its top-line growth is likely to be muted in the next few quarters as TSA and Sports Chalet liquidate their inventory. That said, DKS is poised to materially benefit in FY'17 as it should capture a significant portion of the displaced market share. This should help support its multiple even as it faces NT pressures."
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Shares of Dick's Sporting Goods closed at $41.36 yesterday.