Analysts Are Divided On Dick's Sporting Goods Despite Huge Q3 Beat

Dicks Sporting Goods DKS shares skyrocketed after the retailer delivered a big third quarter earnings beat on Tuesday. The company reported a 6% comp gain, its strongest same-store sales since 2013.

Premium Footwear Is Boosting Brand Image

Following the positive report, Bank of America analyst Robert Ohmes says the company is becoming a “one-stop shop” for athletic footwear and apparel.

Ohmes says he believes the company’s same-store sales momentum will continue as the retailer is receiving better lifestyle products from Nike Inc NKE and Adidas AG (ADR) ADDYY

The analyst added that recent allocations of adidas' Yeezy brand is helping Dicks gain mindshare as a premium footwear retailer.

Bank of America raised its price target from $55 to $60 and reiterated a Buy rating.

Growth May Not Be Sustainable

Raymond James analyst Matthew McClintock has a significantly more bearish stance, saying he does not believe the company’s recent strong performance is sustainable.

“We believe recent momentum is a reflection of easy compares, a strong consumer backdrop and the current lack of any ongoing merchandising issues,” McClintock said. “None of this seems to indicate that the business will see sustainable comp improvements at the levels seen in the third quarter going forward.”

Raymond James maintains an Underperform rating on the company.

RBC analyst Scot Ciccarelli took a similar stance, questioning the sustainability of Dicks strong results.

The analyst said although the quarter was clearly strong, he questions the sustainability of current trends as the company is facing direct competition against its own vendors in Nike and Adidas.

Both brands are making a heavy push into direct-to-consumer operations, leaving many retailers in the dust.

RBC maintains a Neutral rating but raised its price target from $40 to $47.

Tigress Says To Buy On Any Pullback

Tigress Financial Partners analyst Ivan Feinseth says the company continues to benefit from strong athletic apparel and footwear sales.

Feinseth highlighted that the company continues to see a significant increase in in-store traffic and average ticket sales. Dicks reported growth in all of its primary segments in the third quarter, he added.

“I believe further upside exists from current levels and would be an aggressive buyer on any pullbacks below $40 a share,” said Feinseth.

Dicks Sporting Goods Price Action

Shares of Dicks Sporting Goods were down 1.39% to $46.17 at time of publication Wednesday.

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