Why Susquehanna Loves Dick's

In a report published Thursday, Susquehanna analysts upgraded

from Neutral to Positive, while raising the price target from $61 to $68, ahead of the Analyst Day scheduled for April 14. The analysts expect the Analyst Day to be "favorable" and focus investor attention "back to sales (~8-10% CAGR) and earnings (~15% CAGR) growth." This could set the stage for appreciation in Dick's share price "as the year unfolds." In the report Susquehanna noted, "Recall management guided 1Q comp at flat to +2% after posting +3.4% comp in 4Q, in part due to unfavorable weather in February and some port delays. This would assume the more productive segments of the business (excluding golf and hunting) comp +1-3% vs. +6% in 4Q and solid MSD during all of FY14." The analysts expect sales to have "improved somewhat" in March and for the trend to continue into April. Checks with weather sources suggest that most of the country would experience "generally dry, above-average temperatures" in April. "With the right product, marketing message, and e-commerce fulfillment we have confidence in the business," the report added. The contribution of Golf has contracted from 20 percent of sales in FY13 to high teens in FY14. It could decline to about 15 percent in FY15. "Expectations are for a comp decline this season primarily from lower units as inventories have largely contracted across the category. However, based on conversations with key brands, pricing is up as are margins," the analysts commented. The EPS estimate for 2015 has been raised from $3.17 to $3.19. There is potential for "meaningful" addition to earnings in FY17, with the expiry of the GSI e-commerce fees.