Argus Lowers Price Target On Dick's Sporting Goods

On Friday Argus issued a company update on Dick's Sporting Goods Inc. DKS amid pressure from online sellers and ongoing challenges in the company's business segments. Argus maintained Dick's Sporting Goods as a Buy but lowered their one-year price target from $63 to $50. Christopher Graja, an analyst at Argus, wrote, "We continue to believe that Dick's has the opportunity to...expand the size and profitability of its e-commerce business, and raise its overall operating margin...Margin expansion is likely to be aided by increased sales of exclusive merchandise...The lower 4Q estimate is...based on promotions and markdown pressure...We are more cautious with our BUY recommendation amid...ongoing challenges in the golf and hunting categories." Although Argus lowered Dick's Sporting Goods' price target they did highlight several positive catalysts in the company going forward: 1. Management has been effective in allocating store space to higher margin items such as women's apparel rather than low margin items such as golf. 2. Margin expansion has increased due to efforts such as tailoring stores to regional markets and expanded use of technology in inventory management. 3. The company's expertise of workers such as bike technicians, golf professionals, and certified fitness trainers add value to the customer experience and can increase sales of products. Currently, Dick's Sporting Goods is trading at $37.09, down 1.85 percent.