CCH Holdings prices IPO at $4 per share on NASDAQ
Investing.com -- Citi upgraded Dick’s Sporting Goods to Buy in a note on Tuesday, calling the company “a winner in athletic retail” following its merger with Foot Locker.
“With the close of the DKS/FL deal on 9/8, we are upgrading DKS from Neutral to Buy and raising our TP from $225 to $280,” Citi said.
The bank argued the merger will create “a powerful force in the world of athletic footwear and apparel.”
Citi estimates that the combined company will generate $22.5 billion in fiscal 2026 sales, including around $20 billion in the U.S.
For comparison, it noted that “the next player within the US (JD) [is] at $4.3BN in sales.” The analysts added: “Their buying power with the largest and most sought-after brands in athletic should make them a ‘category killer’, in our view.”
The report also highlighted the upside potential in synergies. While management has guided for $100 million to $125 million in initial synergies, Citi said this is “well below the long-term opportunity as they do not assume SG&A synergies, setting up DKS for +MSD topline growth and a multi-year EBIT margin expansion opportunity as they improve the FL business.”
Citi laid out 10 reasons to back the new company, including a healthy customer base, strong brand partnerships, opportunities in private label, and the ability to leverage platforms such as GameChanger and Dick’s Media Network.
It also pointed to the potential for valuation gains, saying the stock offers “attractive valuation with multiple expansion potential.”