JPMorgan Reiterates Nike's Overweight Rating on Dick's Sporting Goods Expansion

JP Morgan published a report Monday reiterating an Overweight rating on Nike

and a price target of $64. In the report, JP Morgan commented, "Dick's (one of NKE's key partners) raised its long-term store saturation target to “over 1,100 stores” from 900 previously on its 4Q call. Specifically, this represents a doubling of its current store base (vs. today) and a 22% increase in the company's previous saturation target (7-8% sq ft growth in FY13 moving to 9-10%). Importantly, NKE is the company's largest single vendor, representing 15% of DKS total merchandise (latest 10-K)—a strong lateral positive in our view." "NKE Field House shop-in-shop rollout accelerated at DKS . . . On its 4Q call (3/11) Dick's spoke to a planned acceleration of the pace of its vendor shop-inshop strategy in 2013, pointing to the higher margin and sales lift," added the report. Nike closed Monday at $54.53.