Dick's Sporting Goods Stock Rises Ahead of Earnings on Analyst Optimism
On Monday, shares of Dick's Sporting Goods, Inc. (NYSE: DKS) rose by 4% ahead of the company's third-quarter results for the fiscal year 2024. The company is expected to announce these results on Tuesday, November 26, before the market opens. Analysts from various firms reiterated their positive outlook on the retailer's stock, anticipating strong performance.
Williams Trading maintained its "Buy" rating on Dick's Sporting Goods with a target price of $250. The firm predicts that the company’s third-quarter results will exceed consensus estimates, attributing this to effective strategic promotions, market share gains, and improvements in women's footwear and apparel sales. An analyst from Williams Trading emphasized that despite concerns regarding the optimization of new store concepts, the better product allocation and execution by Dick's Sporting Goods have been well received by consumers and have strengthened the retailer's market position.
TD Cowen also reiterated its "Buy" rating with a higher target price of $270 and suggested that the management of Dick's might raise the lower end of its full-year earnings per share (EPS) guidance due to strengths across various product lines. The firm’s valuation is based on a discounted cash flow model that includes a premium over the historical price-to-earnings multiple, reflecting the company's sustainable low double-digit EPS compound annual growth rate potential and high capital returns from new investments.
Ahead of the earnings report, Bloomberg presented consensus estimates forecasting a adjusted EPS of $2.68 and $3.03 billion in net sales for the third quarter. The estimates also predict a 2.5% increase in comparable store sales. For the full year 2025, the EPS estimate is $13.91, with a projected 3.37% increase in comparable sales.
Additional analyst comments from Citi indicate a potential increase in the 2024 full-year EPS guidance, while Wedbush anticipates a quarter in line with expectations. Concerns were raised about the impact of higher costs associated with new store openings and potential challenges in managing tariffs in the upcoming proposed customs duty round.