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Dick's Has A Big Day On April 14th

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In a report published Tuesday, Citi analysts maintained a Buy rating on Dick's Sporting Goods Inc (NYSE: DKS), with a price target of $64, ahead of the company's Investor Day scheduled for April 14 in New York City.

In the report Citi noted, "While the strategy will likely remain similar to what we have seen in the past, we think merchandising changes and category priorities have shifted, which will lead to an update of long term financial targets. We expect the increased clarity and visibility from mgt on the long range plan will be viewed positively and we maintain our Buy rating."

The analysts expect Dick's to focus on organic growth from store reallocations, especially on the faster growing categories like women's, youth and team sports, as well as stabilization in golf and hunting segments and continued returns to shareholders.

The company may also highlight e-commerce development, since it is approaching the 2017 GSI contract expiration.

Citi's Top Predictions for the Analyst Day are:
1. Updated long term growth targets - The analysts forecast a three-year top-line CAGR of about 12 percent and an EPS CAGR of 17 percent through FY18.

2. Ongoing new store growth plans – The company has recently reiterated prospects of opening about 800 stores by FY18. This could include about 45 new Dick's stores every year and continued growth in Field & Stream.

3. E-commerce outline – There could be a pickup in momentum in the company's online growth, with the development of a new platform and a shift from a third party vendor. These forecasts are against the backdrop of the company's previous guidance of around 11 percent penetration by FY18.

4. Continued usage of the B/S – Dick's has recently announced a 10 percent dividend hike as well as continuation of its five-year share buyback program worth $1 billion. "In addition, we expect mgmt to continue focusing on differentiating itself from B&M and online competition through strong vendor partnerships & merchandising," the analysts wrote.

"DKS remains our favorite idea for 2015 based on the strength of the athletic category, strong merchandising, and easier compares," the report added.

Latest Ratings for DKS

DateFirmActionFromTo
Nov 2016WedbushInitiates Coverage OnOutperform
Oct 2016Cowen & Co.UpgradesMarket PerformOutperform
Sep 2016GuggenheimInitiates Coverage onNeutral

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Posted-In: CitiAnalyst Color Reiteration Analyst Ratings

 

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