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Investing.com - UBS raised its price target on Dick’s Sporting Goods (NYSE:DKS) to $275.00 from $225.00 on Friday, while maintaining a Buy rating on the stock. The sporting goods retailer, currently valued at $17.3 billion, trades at a P/E ratio of 15.05x, suggesting an attractive valuation according to InvestingPro metrics.
The firm cited Dick’s strong top-line and bottom-line growth in the second quarter, despite what it described as a "very dynamic" environment. With revenue growth of 2.7% and a healthy gross margin of 36.09%, Dick’s second-quarter results exceeded market expectations ahead of the earnings report.
Dick’s Sporting Goods delivered better-than-expected SG&A deleverage due to stronger top-line performance, according to UBS. The company indicated it expects slightly less gross margin leverage for the full year, but this was offset by moderation in some SG&A expenses.
UBS highlighted that Dick’s full-year embedded operating margin assumption remains unchanged, demonstrating what the firm called "flexibility" in the company’s business model. The firm believes this adaptability will "meaningfully expand" as Dick’s incorporates Foot Locker (FL).
The new $275 price target represents approximately 15 times UBS’s calendar year 2027 earnings per share estimate of $18.00, up from the previous multiple of about 14 times. For deeper insights into Dick’s valuation and growth metrics, InvestingPro offers comprehensive analysis with 12 additional key investment tips and a detailed Pro Research Report, available exclusively to subscribers.
In other recent news, Dick’s Sporting Goods reported stronger-than-expected financial results for the second quarter of 2025. The company posted earnings per share of $4.37, surpassing the forecasted $4.30, and revenue of $3.65 billion, exceeding expectations of $3.61 billion. Despite these positive results, there were investor concerns about future challenges, as reflected in the stock’s pre-market trading. DA Davidson raised its price target for Dick’s Sporting Goods to $250, maintaining a Buy rating, citing the company’s robust financial performance and improved gross margins. Similarly, Truist Securities increased its price target to $248, also keeping a Buy rating, following what it described as a solid second quarter. However, Truist noted some concerns about gross margin commentary, which contributed to a mid-single-digit percentage drop in the stock price. These developments highlight the mixed sentiment among investors and analysts regarding the company’s future prospects.
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