Analyst Gets Bullish on Dick’s Sporting Goods, the Last Man Standing in Sports Retail

baseball-serie-1-1555536-640x425Dicks Sporting Goods Inc (NYSE:DKS) received some bullish commentary from analysts at Stifel Nicolaus today, as the last man standing in sports retail benefits from unprecedented consolidation in the industry.

In a research note sent to clients, the firm reiterated its Buy rating on DKS and lifted its price target from $50 to $60. That new target suggests a 10% upside to the yesterday’s closing price of $54.61 per share.

Ahead of the company’s upcoming earnings report on Tuesday, August 16, Stifel believes the market is looking past Q2, which is complicated by the liquidation of chief rival The Sports Authority, and instead concentrating on the upcoming benefits of TSA’s departure from the industry.

The firm expects two big benefits for DKS following TSA’s removal:

  1. Incremental revenue from the assumption of up to 31 leases for choice TSA locations (could be a $180 million-plus annual opportunity, with contributions as soon as Q4), and
  2. Volume capture from closed TSA doors (could be $300 million+ annual opportunity).

Accordingly, Stifel also boosted its earnings estimates for DKS through 2017.

Dick’s shares fell 54.48 -0.13 (-0.24%) in Friday afternoon trading. DKS has gained 54% year-to-date, nearly eight times the return of the S&P 500 in the same time period.


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