TD Cowen analyst John Kernan has reiterated their neutral stance on DKS stock, giving a Hold rating on November 18.
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John Kernan’s rating is based on a combination of factors that reflect both opportunities and challenges for Dick’s Sporting Goods. The company’s guidance suggests an improved flow-through in the fourth quarter, although this is tempered by slower same-store sales growth, which might be conservatively estimated. The complexity of modeling is highlighted by Foot Locker’s inventory clean-up and significant charges, which add uncertainty to the financial outlook. Despite these challenges, the target price of $226 is based on a 13.5x multiple of the estimated earnings per share for FY27, indicating a balanced view of potential upside and risks.
Additionally, the core business of Dick’s is expected to see a 4% increase in same-store sales for the fourth quarter of FY25, with earnings per share projected above consensus. This suggests a positive incremental earnings before interest and taxes flow-through compared to the previous quarter. However, the uncertainty surrounding Foot Locker’s performance and its impact on Dick’s, alongside the management’s guidance for significant pretax charges, contribute to a cautious outlook. As such, Kernan’s Hold rating reflects a view that while there are positive indicators, the risks and uncertainties warrant a more conservative stance.
In another report released on November 18, J.P. Morgan also maintained a Hold rating on the stock with a $228.00 price target.