Stifel cuts Dick’s Sporting Goods target to $226, keeps hold rating

Published 12/03/2025, 15:04
Stifel cuts Dick’s Sporting Goods target to $226, keeps hold rating

On Wednesday, Stifel analysts adjusted their outlook on Dick’s Sporting Goods (NYSE:DKS) shares, reducing the price target from $240.00 to $226.00 while maintaining a Hold rating on the stock. The revision followed the company’s fourth-quarter earnings report, which revealed net sales of $3.894 billion. According to InvestingPro data, the stock has experienced significant volatility recently, with a 8.14% decline in the past week, though maintaining strong fundamentals with a GOOD overall financial health score. This figure surpassed both Stifel’s own projection of $3.764 billion and the consensus estimate on Wall Street of $3.777 billion, with a 6.4% increase compared to Stifel’s anticipated 2.0% and the Street’s 3.1%.

Despite the stronger-than-expected sales, Dick’s Sporting Goods reported lower earnings, with a contribution of $3.62 per share against Stifel’s estimate of $3.67 and the Street’s $3.52. The shortfall was attributed primarily to items below the line. The company maintains robust profitability metrics, with a healthy gross profit margin of 35.79% and an impressive return on equity of 43% over the last twelve months. Looking ahead, the company provided revenue guidance for fiscal year 2025, projecting between $13.6 billion and $13.9 billion. This forecast aligns with the higher end of previous Street estimates but falls below Stifel’s expectations.

The earnings per share (EPS) guidance for fiscal year 2025 was set at $13.80 to $14.40, which is roughly flat compared to the previous year, with a variation of plus or minus 2 percentage points. With a current P/E ratio of 14.16 and a notably low PEG ratio of 0.56, InvestingPro analysis suggests the stock is trading at attractive valuations relative to its near-term earnings growth potential. Subscribers can access 13 additional ProTips and comprehensive valuation metrics. Stifel noted that this guidance did not meet the prevailing estimates, citing investments in selling, general, and administrative expenses (SG&A) as a limiting factor for gross profit dollar flow-through.

Additionally, the report touched upon the expected returns from the next generation of store models. The anticipated cash-on-cash returns for the House of Sport and Field House concepts were revised downward to 25% and 40%, respectively, from previous expectations of 35% and 65%. This suggests challenges to the store buildout model.

Stifel also highlighted the risks associated with the current inventory levels. While increased inventory could potentially drive sales in the spring of 2025, it also raises the risk of markdowns if the business were to experience a slowdown.

In conclusion, Stifel’s analysis suggests that the risk-reward profile for Dick’s Sporting Goods is balanced. The firm’s price target of $226.00 is based on a 15 times price-to-earnings (P/E) ratio of the estimated $15.05 EPS for fiscal year 2026. InvestingPro analysis indicates the stock is currently trading above its Fair Value, with analyst targets ranging from $155 to $285. For deeper insights, including exclusive financial health metrics and real-time valuation updates, investors can access the comprehensive Pro Research Report, available with an InvestingPro subscription.

In other recent news, Dick’s Sporting Goods reported strong fiscal fourth-quarter results, with revenues of $3.894 billion, surpassing both Stifel’s projection and the consensus estimate. The company also saw a 6.4% increase in comparable store sales, marking its strongest growth in over two years. Despite these positive results, Dick’s Sporting Goods’ guidance for fiscal year 2025 was more conservative than some analysts expected, with earnings per share (EPS) projected between $13.80 and $14.40, below the consensus estimate of $14.82.

This cautious outlook led to adjustments in price targets by several firms, including Williams Trading, which lowered its target to $243 while maintaining a Buy rating, and Telsey Advisory Group, which reduced its target to $250 but kept an Outperform rating. Raymond (NSE:RYMD) James maintained a Market Perform rating, noting the company’s strategic investments in new store formats and digital services as potential growth drivers. DA Davidson reaffirmed a Buy rating with a $280 price target, expressing confidence in the company’s market share gains and financial health despite conservative guidance.

Stifel maintained a Hold rating with a $240 price target, highlighting the company’s revenue beat but noting a shortfall in EPS compared to their expectations. Dick’s Sporting Goods’ strategic focus includes expanding its House of Sport and Field House store concepts, which are expected to bolster its physical presence. The company also reported an 18% year-over-year increase in inventory, which analysts suggest requires further clarification. These recent developments indicate a mixed outlook for Dick’s Sporting Goods, with analysts closely monitoring the company’s strategic initiatives and financial performance.

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

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