Truist cuts Dick’s Sporting Goods PT to $230, keeps Buy rating

On Wednesday, Truist Securities adjusted its outlook on Dick’s Sporting Goods (NYSE:DKS), reducing the price target from $245.00 to $230.00, while reaffirming a Buy rating on the company’s stock. The shares of Dick’s Sporting Goods experienced a modest increase on the same day, contrasting with the S&P 500 which remained relatively unchanged.

Analysts at Truist Securities acknowledged that the company’s confirmation of its full-year guidance and solid performance in the first quarter were generally expected or slightly exceeded investor expectations. However, they pointed out two main concerns. Firstly, the recent acquisition of Foot Locker (NYSE:FL), which is not rated (NR), is considered an ongoing concern. Secondly, there is apprehension about potential macroeconomic pressures that could affect the company in the second half of 2025. Despite these concerns, InvestingPro data shows strong fundamentals with a current ratio of 1.76 and 15 consecutive years of dividend payments, demonstrating financial stability.

Despite these concerns, Truist Securities believes that Dick’s Sporting Goods has several competitive advantages that will continue to promote growth. These advantages include differentiated product assortments, a resilient customer base, and key initiatives aimed at growth and margin expansion, such as the GameChanger program.

The adjustment of the price target to $230 from $245 reflects a cautious stance due to the overhang from the Foot Locker acquisition and the anticipation of macroeconomic challenges. Nonetheless, the firm’s Buy rating indicates a positive outlook on the stock’s potential performance.

In other recent news, Dick’s Sporting Goods reported impressive financial results for the first quarter of 2025, surpassing Wall Street’s expectations. The company achieved earnings per share of $3.37, exceeding the forecasted $3.20, and revenue reached $3.17 billion, beating the anticipated $3.12 billion. This strong performance was driven by a 5.2% increase in consolidated sales, with comparable sales rising by 4.5%. Additionally, Dick’s Sporting Goods ended the quarter with $1 billion in cash and cash equivalents, despite a 12% year-over-year increase in inventory levels.

The company has announced plans to acquire Foot Locker, a move expected to close in the second half of 2025, which could expand its global reach. This acquisition is anticipated to be accretive to Dick’s earnings per share in the first full fiscal year following the close, with potential cost synergies identified. Analysts from firms such as Oppenheimer have been closely monitoring the transaction, noting the strategic benefits it could bring.

Furthermore, Dick’s Sporting Goods continues to expand its retail footprint with the opening of new House of Sport and Fieldhouse locations. The company maintains a positive outlook for the full year, reaffirming its guidance for comparable sales growth of 1-3% and expected EPS between $13.80 and $14.40. These developments reflect the company’s effective operational strategies and strong brand partnerships, positioning it well in the competitive sporting goods market.

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