Citi maintains Neutral on Dick’s Sporting Goods, $200 target

On Thursday, Citi reaffirmed its Neutral stance on Dick’s Sporting Goods (NYSE:DKS) shares, maintaining a $200.00 price target. Citi analysts highlighted the company’s solid first-quarter performance, which included a 4.5% increase in comparable store sales and earnings per share (EPS) of $3.37. The strong results were attributed to Dick’s Sporting Goods’ popular brand assortment, especially in footwear, and its advantageous position within the active lifestyle market. According to InvestingPro data, the company maintains strong profitability with a 35.9% gross margin and trades at a P/E ratio of 12.45x, suggesting an attractive valuation relative to its growth potential.

Despite facing higher tariffs than initially anticipated, management expressed confidence in their ability to mitigate the impact on margins and upheld their fiscal year 2025 (F25) EPS guidance of $13.80 to $14.40. Citi analysts noted that even if gross margins were to be affected by tariffs, robust comparable store sales could help safeguard EPS from downside risks. This suggests a low earnings risk for the current year while the market assesses the recent acquisition of Foot Locker (NYSE:FL). InvestingPro analysis shows the company maintains a healthy financial position with a current ratio of 1.76 and sufficient cash flows to cover interest payments, supporting management’s confidence in navigating these challenges.

However, Citi pointed out that management provided limited new information regarding the strategy for integrating Foot Locker, which could continue to exert pressure on the stock. With Dick’s Sporting Goods trading at an estimated fiscal year 2025 price-to-earnings (P/E) multiple of approximately 13.0 times, Citi believes that the risk/reward profile is balanced at the current stock price levels. For deeper insights into DKS’s valuation and growth prospects, including 12 additional ProTips and comprehensive financial metrics, investors can access the full analysis through InvestingPro’s detailed research report.

In other recent news, Dick’s Sporting Goods reported first-quarter 2025 earnings that exceeded Wall Street expectations, with earnings per share (EPS) of $3.37, surpassing the forecasted $3.20. Revenue also outperformed projections, reaching $3.17 billion compared to the anticipated $3.12 billion. The company has confirmed its full-year guidance, maintaining a positive outlook with expected EPS between $13.80 and $14.40. Meanwhile, Dick’s acquisition of Foot Locker remains a focal point, with the deal anticipated to close in the second half of 2025, potentially enhancing the company’s global reach.

Analysts have responded to these developments with adjusted price targets. DA Davidson, Truist Securities, and Morgan Stanley (NYSE:MS) have all maintained their positive ratings on Dick’s Sporting Goods while lowering their price targets to $230 and $232, respectively. These adjustments reflect a recalibration of expectations, taking into account the company’s strong performance and strategic initiatives, such as the integration of Foot Locker and growth in its GameChanger business. Despite these target reductions, analysts remain optimistic about the company’s potential for growth, citing its strategic partnerships and customer engagement efforts.

Dick’s Sporting Goods continues to navigate market challenges, including tariffs and macroeconomic pressures, while maintaining strong vendor relationships. The company ended the quarter with $1 billion in cash and cash equivalents, and inventory levels rose by 12% year-over-year. These financial metrics, along with the company’s ongoing strategic initiatives, suggest a resilient outlook amid a complex retail environment.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.