UPDATE: Morgan Stanley Upgrades Dick's Sporting Goods on Attractive Entry Point

In a report published Monday, Morgan Stanley analyst David Gober upgraded Dick's Sporting Goods DKS from Equal-Weight to Overweight, and named a $59.00 price target.

In the report, Morgan Stanley noted, “DKS is an undervalued growth story that will take shape in 2014 as capex investments and margin initiatives bear fruit. Near-term challenges appear reflected at 15x 2014e P/E, and DKS is a relatively cheap way to gain exposure to a broader health and wellness trend. We set a $59 price target. DKS shares have underperformed consumer discretionary by 1,800 bps YTD and 3,000 bps over the past 12 months. While 2Q results are likely to be underwhelming, we believe this is well-known and creates an attractive entry point for a fundamentally sound medium-term story. While not without risks, our $59 PT has 16% upside with a favorable risk reward skew (50% to bull, 37% to bear).”

Dick's Sporting Goods closed on Friday at $50.70.