How 2 Dick's Sporting Goods Analysts Reacted To Retailer's Q2 Beat

One Dick’s Sporting Goods DKS analyst issued an upgrade and another a downgrade following the retailer's second-quarter earnings report.

The Dick's Sporting Goods Analysts: Oppenheimer analyst Brian Nagel downgraded Dick's Sporting Goods from Outperform to Perform and raised the price target from $52 to $56. 

Morgan Stanley analyst Simeon Gutman upgraded the stock from Equal-weight to Overweight and raised the price target from $40 to $65. 

The Dick's Sporting Goods Takeaways: Oppenheimer believes shares are now fully valued thanks to a 220% increase from their late March bottom, Nagel said in a Thursday downgrade note. 

Oppenheimer upgraded the stock in June when shares were trading for less than $40 on the premise that the company could weather COVID-19 headwinds and was cheap on a valuation basis, the analyst said. 

Morgan Stanley's Gutman said Dick’s Sporting Goods is staging a second-half comeback and has more upside ahead. 

The retailer has underappreciated earnings per share power and an inexpensive valuation, the analyst said.

Dick's Sporting Goods could see 10% earnings per share growth through 2022, he said.

Morgan Stanley's new $65 price target is based on a multiple of 12.5 times 2022 earnings per share of $5.15. 

DKS Price Action: Dick's Sporting Goods shares were down 1.78% at $53 at the close Thursday. 

Benzinga’s Take: Dick’s Sporting Goods reported a 20.1% increase in sales for the second quarter. The quarter was highlighted by e-commerce growth of 194%. That segment made up 30% of total sales versus 12% in the prior year.

The first three weeks of the third quarter have seen same-store sales growth of 11%.

Related Link: Recap: Dick's Sporting Goods Q2 Earnings

Photo by Mike Mozart via Wikimedia.