On Tuesday, Citi reiterated its Neutral rating on Dick's Sporting Goods (NYSE:DKS) with a steady price target of $220.00. The firm anticipates the company to surpass consensus comparable store sales (comps) forecasts when it reports first-quarter earnings before the market opens on May 29. Citi projects a 3.0% increase in first-quarter comps, slightly above the consensus estimate of 2.5%.
Despite the expected sales beat, Citi predicts Dick's Sporting Goods will report lower first-quarter earnings per share (EPS) of $2.91, compared to the consensus estimate of $3.02. The anticipated decrease is attributed to a shift in higher selling, general, and administrative (SG&A) expenses, along with pre-opening costs, into the first quarter.
Citi expects that management will maintain its full-year 2024 EPS guidance range of $12.85 to $13.25, which is slightly below the consensus expectation of $13.32. This guidance is based on the company's projected comps growth of 1-2% for the fiscal year.
The firm highlighted Dick's Sporting Goods' favorable position within the athletic and sporting goods sector, noting its higher-income customer base and access to in-demand brands such as Nike (NYSE:NKE), Hoka, and On. These factors are believed to support the company's ability to achieve positive comps in fiscal 2024, despite broader industry challenges.
However, Citi also pointed out that Dick's Sporting Goods is a popular investment, and with the stock's recent price increase, investor expectations are high. This situation suggests that the current risk/reward balance for the stock is even, given these heightened expectations.
InvestingPro Insights
As Dick's Sporting Goods (NYSE:DKS) gears up to report its first-quarter earnings, real-time data from InvestingPro provides a deeper financial perspective on the company. With a market capitalization of $15.85B and a robust P/E ratio of 15.31, Dick's Sporting Goods demonstrates significant market presence and investor confidence. The company has also shown a steady revenue growth of 4.98% over the last twelve months as of Q1 2024, indicating a positive trajectory in its financial performance.
InvestingPro Tips highlight that Dick's Sporting Goods has maintained dividend payments for an impressive 14 consecutive years, which may be a point of interest for income-focused investors. Additionally, the company is noted for its strong return over the last year, with a 57.38% one-year price total return, reflecting its ability to generate shareholder value in a challenging market environment.
For those interested in gaining a more comprehensive understanding of Dick's Sporting Goods' financial health and investment potential, there are additional InvestingPro Tips available. These include insights on the company's volatility, debt levels, and profitability predictions for the year. To access these insights and more, consider subscribing to InvestingPro. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. Remember, there are 14 additional InvestingPro Tips waiting to guide your investment decisions.
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