Street Calls of the Week
Investing.com - DA Davidson raised its price target on Dick’s Sporting Goods (NYSE:DKS) to $270 from $250 while maintaining a Buy rating on the stock. Currently trading at $227.72 with a market capitalization of $18.24 billion, InvestingPro analysis indicates the stock is trading near its Fair Value.
The firm’s updated model now includes estimates for the combination of Dick’s Sporting Goods and Foot Locker, projecting $0.40 of accretion from Foot Locker over the next twelve months, which includes $60 million in year-one synergies. The company’s solid financial position, with an EBITDA of $1.91 billion and revenue growth of 2.7% in the last twelve months, provides a strong foundation for this acquisition.
DA Davidson expects operating margins to decline in fiscal year 2025 due to Foot Locker’s lower profit rate but anticipates improvement as Dick’s identifies sourcing and labor efficiencies.
The firm’s long-term outlook suggests Dick’s could reach over $23 in earnings per share by 2030, based on annual sales growth of 2.5%, EBIT growth of approximately 8%, and EPS growth in the low double digits, including share buybacks.
DA Davidson views Dick’s significant increase in seasonal hiring as "a bullish sign for near term trends," with the new price target based on 17 times the firm’s 2026 EPS forecast. The stock currently trades at a P/E ratio of 15.94, with analyst targets ranging from $170 to $298.
In other recent news, Dick’s Sporting Goods reported its financial results for the second quarter of 2025, with earnings per share (EPS) of $4.37, slightly surpassing the forecast of $4.30. The company’s revenue reached $3.65 billion, marginally beating the expected $3.61 billion. Dick’s Sporting Goods also completed its acquisition of Foot Locker, which included an exchange offer for Foot Locker’s 4.000% Senior Notes due 2029. The company issued $381.93 million in new notes and paid $1 million in cash for the tendered notes. Truist Securities raised its price target for Dick’s Sporting Goods to $275.00, reflecting the acquisition’s positive impact. UBS maintained its Buy rating and matched the $275.00 price target, citing the completed acquisition. Additionally, Dick’s Sporting Goods released updated unaudited pro forma financials related to the Foot Locker acquisition. These developments highlight the company’s strategic moves and financial performance in recent months.
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