Market Overview

Citi Upgrades Dicks Sporting Goods, A Retail Survivor

Citi Upgrades Dicks Sporting Goods, A Retail Survivor
Related DKS
Following Successive Market Gains, Investors Appear To Be Taking Some Profits
34 Stocks Moving In Wednesday's Mid-Day Session

Dicks Sporting Goods Inc (NYSE: DKS) could get back in the game in 2018.

The sporting goods retailer has had little to celebrate in 2017, with shares down 44 percent year-to-date, amid a rapidly changing industry and a heavily promotional environment.

A new sell-side report projects that Dicks will clear the low expectations it has set for itself in 2018 thanks to a host of catalysts.

The Analyst

Kate McShane of Citi upgraded Dicks Sporting Goods from Neutral to Buy and raised the price target from $28 to $35. 

The Thesis

Although Dicks Sporting Goods emerged as the victor amid bankruptcies and a consolidating sporting goods retail space, shares fell alongside the industry's prospects, prompting fears that retail sporting goods stores may soon be a thing of the past.

But with a strong brand and revised outlook, Dicks appears to be the Best Buy Co Inc (NYSE: BBY) of its sector — the long-term survivor in a struggling industry, McShane said. The company could clear some of the hurdles it faced in the prior year, the analyst said. 

Dicks Sporting Goods pulled back 2018 expectations during the third quarter, forecasting an EPS decline of up to 20 percent. Citi projects upside to these low expectations, McShane said. 

“We see upside to [the] DKS 2018 EPS outlook on better sales from cold weather, [the] industry’s workdown on inventory to help 2H, newness from the vendors and more exposure to growth brands like Adidas," she said. 

Citi ranks Dicks Sporting Goods as the No. 4 company in its apparel and footwear picks.

Price Action

Dicks closed Tuesday at $29.27, down 1.11 percent. 

Related Links: 

Citi Names 'Controversial' Foot Locker As Its Top Footwear, Apparel Pick

Analyst Raises Nike Price Target Ahead Of Q2 Print

Photo from Wikimedia. 

Latest Ratings for DKS

Oct 2018Morgan StanleyMaintainsEqual-WeightEqual-Weight
Aug 2018Canaccord GenuityMaintainsHoldHold
Aug 2018Wells FargoMaintainsOutperformOutperform

View More Analyst Ratings for DKS
View the Latest Analyst Ratings

Posted-In: Citi Dicks Sporting Goods retailAnalyst Color News Upgrades Price Target Analyst Ratings Best of Benzinga


Related Articles (BBY + DKS)

View Comments and Join the Discussion!

Latest Ratings

AAPLWedbushInitiates Coverage On310.0
DHTJP MorganUpgrades0.0
DXCMGoldman SachsUpgrades125.0
ORLYJP MorganUpgrades398.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Hanesbrands Loses A Longtime Bull

Gene Munster On Apple's 2018 Outlook