Dick's Sporting Goods (DKS): Raising Estimates Ahead of Earnings - Cowen
Cowen analyst, John Kernan, reiterated his Outperform rating on shares of Dick's Sporting Goods (NYSE: DKS) ahead of earnings on 5/16 following Friday's Q4 non-GAAP earnings restatement, where non-cash SG&A costs were revised higher in Q4:16. The analyst thinks expectations are low for Non-GAAP EBITDA to achieve guidance for FY18,
The estimate increase is more to bring his model in line with consensus rather than project upside. The Q1 EPS forecast goes to $0.54 from $0.50, in-line with consensus and management's guidance of $0.50-$0.55. The analyst believes scale and improving execution could position DKS for share gains within its sector.
Embedded expectations include:
1) top-line growth of +10.8% from +10.4%, including SSS of +3%, in-line with +3-4% guidance but below +3.5% consensus
2) gross margin up +10bps vs. -5bps prior
3) 10bps of SG&A deleverage vs. 25bps prior, including expected higher pre-opening expense, driving a 5.3% oper. margin vs. 5% prior and 5.2% consensus.
No change to the price target of $55.
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Shares of Dick\'s Sporting Goods closed at $48.06 yesterday.