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Investing.com - TD Cowen raised its price target on Dick’s Sporting Goods (NYSE:DKS) to $231.00 from $205.00 on Monday, while maintaining a Hold rating on the stock. The sporting goods retailer, currently trading at $222.06 with a market capitalization of $17.8 billion, shows strong financial health according to InvestingPro metrics, with a moderate P/E ratio of 15.52x.
The firm’s updated outlook comes as it presented consolidated estimates for Dick’s Sporting Goods and Foot Locker (NYSE:FL) for 2026, assuming the merger deal closes in late 2025. TD Cowen noted that Dick’s Sporting Goods’ fiscal year 2025 guidance has potential to be raised after second-quarter results, though consensus estimates already approach the high end of guidance with incremental tariffs factored in. InvestingPro data reveals the company has maintained dividend payments for 15 consecutive years, with a current yield of 2.17%.
The analysis now assumes an 85% equity mix and 15% debt structure for the acquisition, compared to the $205 exchange offer price to Foot Locker shareholders. This higher proportion of equity reduces the projected fiscal year 2026/2027 accretion relative to using cash or debt financing.
TD Cowen calculates that each $50 million in synergies would translate to approximately $0.44 in earnings accretion. The firm projects Dick’s will repurchase 5.4 million shares between fiscal years 2026 and 2029.
If Foot Locker returns to a 5% EBIT margin including synergies, TD Cowen estimates Dick’s could generate $21 to $22 in fiscal year 2029 earnings per share, growing EPS at a 10% to 12%+ compound annual growth rate while increasing its dividend from $4.85 to over $6.66.
In other recent news, Dick’s Sporting Goods has launched Cookie Jar & A Dream Studios, an in-house content and production studio focused on sports storytelling. The studio aims to create content showcasing athletes’ journeys and has already achieved recognition with two Sports Emmy Awards. Additionally, Dick’s Sporting Goods has voluntarily withdrawn its pre-merger notification for its planned acquisition of Foot Locker to allow the Federal Trade Commission more time for review, with plans to refile soon. This move is a standard procedure to ensure regulatory compliance in the merger process.
On the analyst front, Loop Capital raised its price target for Dick’s Sporting Goods to $215, maintaining a Hold rating, following discussions about the Foot Locker acquisition. UBS reiterated a Buy rating with a price target of $225, citing market share expansion opportunities. Furthermore, Dick’s Sporting Goods has extended its partnership with the Women’s National Basketball Association through 2028, continuing its role as the Official Sporting Goods Retailer for the league. These developments highlight the company’s strategic initiatives and ongoing partnerships in the sports industry.
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