DICK’S Sporting Goods Today
DICK’S Sporting Goods
(As of 11/27/2024 ET)
- 52 week range
- $120.39
▼
$239.30
- Dividend yield
- 2.06%
- P/E ratio
- 15.68
- Target price
- $244.95
DICK’S Sporting Goods New York Stock Exchange: DKS Before 2020, the company’s stock was considered a quality stock to buy and hold, but its performance since then has supported that fact. This company is firing on all cylinders after establishing itself as a leader in its category and can compete with big box stores like Walmart New York Stock Exchange: WMT, Target New York Stock Exchange: TGTAnd Costco NASDAQ: VALUE. The range of high-quality sporting goods from renowned brands covers all areas of leisure and is a source of energy for athletes. Brand quality is complemented by operational quality, which supports financial health despite business investment and return on capital. The end result is best-in-class retail stocks with a positive growth trajectory, healthy cash flow and sustainable returns for buy-and-hold investors.
DICK’S sporting goods prices rise after record quarter
DICK’S Sporting Goods posted another strong quarter despite macroeconomic headwinds and the negative impact of the calendar shift. The company reported revenue of $3.06 billion, unchanged from the prior year but 100 basis points (bps) better than expected. The growth was driven by an acceleration in retail store growth to 4.2%, more than double the previous year, offset by a reduction of five stores. The company says it had a successful back-to-school season and that the new concepts resonated with consumers. Digital technologies remain a critical element.
DICK’S Sporting Goods Dividend Payments
- Dividend yield
- 2.06%
- Annual dividends
- $4.40
- Annual dividend growth for 3 years
- 47.36%
- Dividend payout ratio
- 32.28%
- Next dividend payment
- December 27
Dividend history of DKS
Margin news is also good. Adjusted results showed some contraction, but GAAP expansion led to growth. However, adjusted earnings per share of $2.75 were down 220 bps. beats MarketBeat consensus and maintains strong financial position. The most important takeaway is that the company maintains stable earnings in a challenging environment and produces sufficient cash flow.
DICK’S has positive cash flow and is able to invest in growth while maintaining its balance sheet and returning capital to investors. The dividend will be $4.40 for investors in 2024, a yield of about 2%, with the stock near all-time highs and buybacks trimming the account down 4.5% year-to-date at the end of the third quarter.
The recommendations are in line with the return on capital forecast. DICK’S raised its full-year guidance due to strong third-quarter results and points to a strong holiday season in the fourth quarter. The company could beat its forecasts due to trends, as it has done all year, and maintain its strength next year. The combined impact of easing monetary headwinds and a consumer-friendly president is expected to support consumer spending trends, if not accelerate them. Analyst forecasts for 2025 are likely low in this scenario, so the upgrade cycle is likely to continue.
Analyst Trends Drive DICK Sporting Goods Inventory Prices Higher
Analyst trends for 2024 are optimistic and unlikely to change given third-quarter results and guidance. Trends include multiple upgrades and price target increases, with sentiment rising to Moderate Buy from Hold and the price target up 70% over 12 months. The consensus price target suggests fair value near all-time highs, but revision trends put the stock in the upper range of around $280, 20% above the critical resistance point and well above the current all-time high.
The critical resistance point is near $235 and may be reached in the near future. Otherwise, shares may remain range-bound at current levels until signs of growth emerge in 2025. This could happen after the company releases its fourth-quarter earnings report, which is due in February. The worst-case scenario is that this stock moves to the bottom of its trading range before continuing its uptrend, and this move becomes the best entry point. Even so, with the stock trading at 15x and expected to rise another single digit in 2025, it’s a cheap stock that generates a healthy and reliable return on capital worthy of inclusion in a dividend growth portfolio.
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