Goldman Sachs (NYSE:GS) has reaffirmed its positive stance on Dick's Sporting Goods (NYSE:DKS), maintaining a Buy rating and a price target of $261.00 on the retailer's shares.
The endorsement comes after Dick's Sporting Goods reported a second-quarter adjusted earnings per share (EPS) of $4.37, surpassing the Refinitiv consensus of $3.83. This performance was driven by a same-store sales (SSS) increase of 4.5%.
Despite the positive earnings report, shares of Dick's Sporting Goods (NYSE: DKS) closed down approximately 5% on Thursday, in contrast to a minor 0.2% dip in the S&P 500 index. Goldman Sachs noted that their fiscal year 2024 earnings estimate for the company has been slightly raised in light of the recent results.
The firm's confidence in Dick's Sporting Goods is rooted in several key factors. According to Goldman Sachs, the company is poised to continue reaping benefits from a persistent trend towards health and wellness, coupled with strong brand appeal and market share gains.
Furthermore, the retailer is expected to maintain structurally higher margins, with both gross margins and earnings before tax (EBT) remaining significantly above pre-pandemic levels.
In other recent news, Dick's Sporting Goods has reported a robust performance in the second quarter of 2024. The company exceeded estimates with a 7.8% increase in sales to nearly $3.5 billion and a 55% year-over-year increase in earnings per share (EPS) to $4.37.
Comparable store sales also saw a rise of 4.5%. In response to the strong performance, the company has raised its non-GAAP EPS guidance for 2024 to a range of $13.55 to $13.90, up from the previous forecast of $13.35 to $13.75.
Analysts have adjusted their outlook on the company following these results. Citi reduced its price target to $230, while Jefferies raised its target to $225, and Telsey Advisory Group maintained its target at $260. Despite the positive results, analysts have expressed concerns about potential headwinds in the second half of the year and a possible slowing of comparable store growth.
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