Executive Summary
After analyzing Dick’s Sporting Goods and taking into account both positive and negative aspects associated with the stock, I am giving the stock a Moderate Buy Recommendation, with a target price of $46.50. The recommendation took into account DKS’s recent earnings report, improving financial health, growth estimates, and industry outlook.
In this report I will evaluate the current overall economic conditions and how they affect the Sporting Goods Stores industry and the Retail sector in general. The report then focuses on Dick’s Sporting Goods’ key measure of financial health, profitability, and growth compared to historical levels and competitors. A P/E Multiple analysis and a Free Cash Flow to Equity valuation approach was then used to derive an intrinsic value of the stock.
Company Overview
Dick’s Sporting Goods is the largest Sporting Goods Store in the United States, selling sports equipment, exercise and fitness equipment, apparel and footwear along with outdoor sports equipment and accessories. Dick’s was founded in 1948 and operates 455 stores in 42 states primarily in the eastern part of the United States.
Dick’s Sporting Goods controls 13.4% of the market share within the industry and has the largest market