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Dick’s Sporting Goods Soars on Q4 Earnings, Pulls Guns

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On Monday, Dick’s Sporting Goods (NYSE:DKS) stock fell 1.43% and closed at $34.48. Based on the last closing price, the company has a market capitalization of $3.03 billion. The Dow Jones Industrial Average and the S&P 500 fell 7.8% and 7.6%, respectively. The broader markets fell due to coronavirus fears and oil shock.

Currently, Dick’s Sporting Goods stock is trading 30.8% below its 52-week high of $49.80 on December 31, 2019. The stock was also trading 10.3% above its 52-week low of $31.27 on August 15, 2019. On a year-to-date basis, the stock has fallen by 30.3% as of Monday. The stock price has fallen 5.48% in the trailing five-day period, while it has fallen 8.9% in the trailing 12-month period.

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Dick’s Sporting Goods Q4 earnings results

Dick’s Sporting Goods stock rose 8.9% as of 9:40 AM ET today after the company announced strong earnings results for the fourth quarter of fiscal 2019. The company’s fourth-quarter adjusted EPS grew 23.4% YoY (year-over-year) to $1.32. The adjusted EPS beat analysts’ estimate of $1.22.

The company’s bottom line gained from strong revenues and a gross margin expansion by 23 basis points. The revenues rose 4.7% to $2.61 billion and beat Wall Street’s forecast of $2.56 billion. The same-store sales grew 5.3% and beat analysts’ expectation of 3.0%.

According to a CNBC report, “Dick’s reported growth in the number of transactions in stores and shoppers’ average ticket, despite the compressed holiday selling season and the challenging conditions we faced with unseasonably warm weather,” CEO Ed Stack said. The report also said, “Still, looking ahead, the company has to balance enthusiasm with a degree of caution because of the coronavirus outbreak.”

Dick’s Sporting Goods plans to remove hunting equipment, including guns, from an additional 440 stores this year. Last year, the company announced that it would remove hunting supplies after the school shooting in Parkland, Florida, in 2018.

Dick’s Sporting Goods expects same-store sales growth of 0%–2% in fiscal 2020 compared to a 3.7% increase in fiscal 2019.

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The company expects its fiscal 2020 diluted EPS to be $3.60–$4.00. Wall Street expects Dick’s Sporting Goods to report revenues of $8.89 billion in fiscal 2020—a rise of 1.6% YoY compared to $8.75 billion in fiscal 2019. Also, analysts expect the company’s adjusted earnings to rise by 4.1% YoY to $3.84 per share in fiscal 2020.

Analysts’ recommendations for Dick’s Sporting Goods

Among the 26 analysts, seven recommend a “buy”—unchanged from the last month. Meanwhile, 18 analysts recommend a “hold”—unchanged from the previous month. The remaining one analyst recommends a “sell”—unchanged from the previous month. Analysts have an average target price of $49.22 on the stock. The target price implies a return of 42.7% based on the closing price of $34.48 on Monday. The consensus target price for the stock has fallen from $50.53 in February. The lowest target price estimate is $40, while the highest is $60.00.

Technical analysis

On Monday, Dick’s Sporting Goods stock was trading 13.2% below its 20-day moving average of $39.74. Meanwhile, the stock is trading 21.9% below its 50-day moving average of $44.14 and 20.8% below its 100-day moving average of $43.54. The stock’s 14-day relative strength index score of 23 shows that it’s oversold.

Dick’s Sporting Goods has an upper Bollinger Band level of $47.80. The company’s middle Bollinger Band level is $40.03, while its lower Bollinger Band level is $32.26. On Monday, the stock closed near its lower Bollinger Band level, which also suggests that the stock is oversold.

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