TD Cowen analyst John Kernan maintained a Hold rating on Academy Sports and Outdoors yesterday and set a price target of $47.00.
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John Kernan has given his Hold rating due to a combination of factors affecting Academy Sports and Outdoors. One of the primary reasons is the company’s delicate balance between unit sales and average unit retail prices, especially given its customer base of lower to middle-income consumers. This balance is crucial as the company plans significant increases in average unit retail prices, which could impact sales volumes.
Furthermore, there are concerns about the financial returns from new store openings, as evidenced by a decline in omni-channel sales per square foot. The company’s EBIT margins have also been under pressure due to SG&A deleverage, and while there is some optimism for the second half of the year, the uncertainty in comparable sales guidance adds to the cautious outlook. Additionally, consensus earnings estimates appear optimistic, and the company’s ability to meet these expectations is uncertain, contributing to the Hold rating.
Kernan covers the Consumer Cyclical sector, focusing on stocks such as Dick’s Sporting Goods, Lululemon Athletica, and TJX Companies. According to TipRanks, Kernan has an average return of 9.9% and a 55.11% success rate on recommended stocks.
In another report released on August 31, UBS also maintained a Hold rating on the stock with a $52.00 price target.