Sporting goods retailer Dick’s Sporting Goods (DKS) is set to release its Q1 earnings report this week. This has some investors wondering whether it’s a good idea to buy shares of DKS stock beforehand.
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What Wall Street Expects
Wall Street is expecting Dick’s Sporting Goods to announce quarterly earnings of $3.34 per share in its forthcoming Q1 report, representing an increase of 1.2% year over year. Revenues are projected to reach $3.12 billion, increasing 3.4% from the same quarter last year. Comparable store sales are tipped to climb 3% year-over-year.
Will DKS be able to beat these estimates? As one can see below, it has a very strong track record of doing just that in recent times.
Key Issues Ahead of Earnings
Aside from commentary on consumer confidence and any impact from tariffs, analysts will be focusing on Dick’s Sporting Goods recent announcement of a $2.4 billion takeover of rival Foot Locker (FL).
The crowd hasn’t exactly gone wild for the deal, with the share price down around a fifth since.
Telsey Advisory recently lowered the firm’s price target to $220 from $250 and kept an Outperform rating on the shares. The firm expects continued pressure on DKS shares in the near term as investors analyze the rationale, execution risk, and capital priorities regarding the Foot Locker deal. However, it does believe that Dick’s can unlock value from Foot Locker and drive further profitable share gains over the long term.
Truist analyst Joseph Civello has a Buy rating and $245 price target, saying the stock’s initial sell-off following the deal announcement looks like an over-reaction. He talked up the benefits of new customer cohorts/geographies, immense scale, and even more leverage with partners. It has also, it said, created an attractive entry-point into what remains a solid growth story.
Is DKS a Good Stock to Buy Now?
On TipRanks, DKS has a Moderate Buy consensus based on 9 Buy, 12 Hold and 1 Sell rating. Its highest price target is $285. DKS stock’s consensus price target is $220.28 implying an 31.73% upside.
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