Academy Sports stock remains neutral at UBS amid elusive turnaround

UBS maintained its Neutral rating on Academy Sports & Outdoors Inc. (NASDAQ:ASO) with a $48.00 price target in a research note issued Monday.

The investment firm cited ongoing challenges for the sporting goods retailer, noting that a "positive inflection is proving to be elusive" for the company, as evidenced by a 3.67% revenue decline in the last twelve months. UBS indicated the stock would likely remain range-bound until Academy Sports demonstrates a clear turnaround in performance.

The key question surrounding Academy Sports, according to UBS, centers on whether the retailer can stabilize its market share and achieve positive comparable sales. The firm observed that the most recent quarter showed no evidence of such an improvement.

UBS acknowledged that Academy Sports has "some factors working in its favor" but suggested investors would not reward the stock until the company demonstrates concrete progress. The analysis pointed to specific performance metrics needed before market sentiment might shift.

The relatively inexpensive valuation of Academy Sports shares likely provides "some downside support" despite these ongoing challenges, according to the UBS assessment. InvestingPro analysis suggests the stock is currently undervalued, with strong liquidity metrics showing current assets exceeding short-term obligations. The firm’s maintained price target represents its view on the stock’s fair value given current market conditions. For deeper insights into ASO’s valuation and 8 additional key ProTips, visit InvestingPro.

In other recent news, Academy Sports and Outdoors reported its Q1 2025 earnings, revealing an adjusted EPS of $0.76, which fell short of the forecasted $0.8983. The company’s revenue came in at $1.35 billion, slightly below the expected $1.37 billion, marking a 0.9% decrease year-over-year. Despite these challenges, Academy Sports opened five new stores, expanding its footprint to 303 locations, and saw a 10% increase in e-commerce sales. Truist Securities raised its price target for Academy Sports to $47.00 from $45.00, maintaining a Hold rating, citing the success of the expanded Nike (NYSE:NKE) and new Jordan product assortment. However, the firm noted a decline in overall store traffic by mid-single digits in the first quarter and expressed caution about the impact of tariffs on middle-income consumers in the second half of the year. Academy Sports continues to project full-year sales between $5.97 billion and $6.26 billion, with comparable sales expected to range from a 4% decline to a 1% increase. The company is also maintaining its adjusted EPS guidance of $5.45 to $6.25. These developments reflect the company’s ongoing efforts to navigate a challenging retail environment while focusing on strategic initiatives and expansion.

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