“Cut-to-the-Chase” Recommendations
- Week Beginning -
Monday, August 14, 2017

by Ian Harvey

IMPORTANT NOTE: There is no stop-loss or pre-determined sell price recommended – this is left to the discretion of the individual trader.


Option Trade - Foot Locker, Inc. (NYSE:FL) PUTS

Wednesday, August 16, 2017

** OPTION TRADE: Buy the FL SEPT 15 2017 45.000 PUT at approximately $1.60. Sell price is left to your own judgment.

Foot Locker, Inc. (NYSE:FL), a retailer of shoes and apparel, is scheduled to issue its next quarterly earnings report before the market opens on Friday, August 18. Analysts expect $0.92 EPS, down 2.13% or $0.02 from last year’s $0.94 per share. FL’s profit will be $126.57M for 12.80 P/E if the $0.92 EPS becomes a reality. After $1.36 actual EPS reported by Foot Locker, Inc. for the previous quarter, Wall Street now forecasts -32.35% negative EPS growth.

Foot Locker has been suffering from a shift in shoe manufacturers' preferences toward selling to online-only channels over brick-and-mortar stores, according to Credit Suisse.

"Ultimately, we believe the best-in-class execution by Foot Locker may no longer be enough to offset two-fronts of structural industry change," Credit Suisse analysts wrote in a recent note.

Foot Locker was up as of May but then began sliding on industry weakness and on a disappointing earnings report. Shares have continued to fall since then.

When the company reported its fourth-quarter earnings in February the company noted on the call that fiscal 2017 had gotten off to a slow start.

That proved to be true, as the company warned on first-quarter performance in April and then posted disappointing numbers when it issued the full report in May. Foot Locker shares were already sliding on general weakness but plunged 17% when it reported earnings on May 19.

Earnings per share slipped from $1.39 to $1.36, missing estimates of $1.38, and comparable sales increased just 0.5%, which the company blamed on a delay in tax refunds. The company also issued a weak guidance for the current quarter, calling for low-single-digit comparable sales growth.

From there, the stock continued to fall, dropping in June on news that Nike would sell directly on Amazon.com. That was interpreted as a negative sign for Foot Locker, which has a close relationship with Nike.

Analysts and Hedge Funds Opinions

Research analysts at Wedbush decreased their Q4 2018 earnings per share estimates for shares of Foot Locker in a report issued on Thursday. Wedbush analyst C. Svezia now forecasts that the athletic footwear retailer will post earnings per share of $1.63 for the quarter, down from their previous forecast of $1.64. Wedbush currently has an “Outperform” rating and a $72.00 target price on the stock.

Zacks Investment Research downgraded shares of Foot Locker from a “buy” rating to a “hold” rating in a research report on Monday, April 24th.

According to Zacks, “Foot Locker, which has underperformed the industry in the past three months, has been witnessing a downtrend in estimates. This is due to dismal first quarter performance and a not so encouraging outlook for the second quarter and fiscal 2017. Delay in tax refunds broke the positive earnings surprise streak of Foot Locker, as earnings missed the estimate in the first quarter. We further noticed that total sales and comps grew marginally in the first quarter of fiscal 2017, which is in sharp contrast to the company’s performance in fiscal 2016. Nevertheless, management is working on all aspects to attain mid-single digit earnings per share growth in fiscal 2017 backed by effective implementation of operational and financial initiatives.”

Several other analysts have also recently commented on the company…..

Cowen and Company decreased their target price on shares of Foot Locker from $77.00 to $64.00 and set a “market perform” rating for the company in a research report on Monday, May 22nd.

BidaskClub raised shares of Foot Locker from a “strong sell” rating to a “sell” rating in a research report on Monday, July 31st.

Deutsche Bank AG decreased their target price on shares of Foot Locker from $88.00 to $74.00 and set a “buy” rating for the company in a research report on Monday, May 22nd.

Finally, Piper Jaffray Companies set a $60.00 target price on shares of Foot Locker and gave the company a “hold” rating in a research report on Saturday, May 20th.

Ten investment analysts have rated the stock with a hold rating, eighteen have issued a buy rating and one has given a strong buy rating to the company. The stock currently has a consensus rating of “Buy” and a consensus target price of $72.17.

Also, Creative Planning cut its stake in shares of Foot Locker by 26.6% during the second quarter. The fund owned 6,388 shares of the athletic footwear retailer’s stock after selling 2,312 shares during the period.

In other Foot Locker news, Director Jarobin Gilbert, Jr. sold 5,600 shares of the stock in a transaction on Wednesday, May 24th. The stock was sold at an average price of $59.40, for a total value of $332,640.00.

Summary

Foot Locker has a market cap of $6.22 billion, a price-to-earnings ratio of 9.71 and a beta of 0.68. Foot Locker has a 12 month low of $44.59 and a 12 month high of $79.43. The company’s 50-day moving average price is $48.39 and its 200 day moving average price is $63.88.


Option Trade - Urban Outfitters, Inc. (NASDAQ:URBN) PUTS

Tuesday, August 15, 2017

** OPTION TRADE: Buy the URBN SEPT 15 2017 17.000 PUT at approximately $0.90. Sell price is left to your own judgment.

Urban Outfitters, Inc. (NASDAQ:URBN), a lifestyle specialty retail company, report second-quarter fiscal 2018 results today, August 15, after the market closes. In fact, this lifestyle specialty retailer witnessed negative earnings surprise for the last three quarters, with a trailing four-quarter average miss of 2.9%. This finds reflection in the stock’s performance.

The Consensus Estimate for the fiscal second quarter has moved down by a penny to 37 cents in the last seven days. This reflects a year-over-year decline of over 43% from 66 cents. Also, the same was revised downward by 2 cents to $1.39 for fiscal 2018.

As well, analysts expect revenues of $867.5 million, down 2.6% from the year-ago quarter.

Shares of the company have plunged nearly 39% in the last six months, wider than the industry’s decline of 24.4%; the broader Retail-Wholesale sector gained 9.7%.

Challenging retail landscape, aggressive pricing strategy, waning mall traffic and increased online competition are the major deterrents for Urban Outfitters. Investors’ sentiments were hurt when the company in a SEC filing unveiled that the comparable sales for the fiscal second quarter are deteriorating. Also, management anticipates gross margin rate to decrease year over year in the quarter due to rise in delivery and logistic expenses, higher markdowns and lower initial mark up. In fact, its gross margin has shown constant deceleration in the last three quarters.

Further, Urban Outfitters’ sales have lagged the consensus mark for seven of the nine consecutive quarters, including the last reported quarter. Moreover, the company faces stiff competition in the retail segment from other department stores, discounters, home furnishing stores, specialty retailers and direct-to-consumer businesses on attributes such as merchandise assortment, price, quality, location and credit facility.

Results from Macy’s, Kohl's, and Dillard's second quarter earnings are any indication -- shares of the three department store chains are down nearly 10%, 6%, and more than 17%, respectively, in response to their own reports -- it's very likely that Urban Outfitters will share the same fate.

Influencing Factors

Like a lot of department-store chains and mall-based retailers, Urban Outfitters has a rough 2017. Mall traffic is declining and e-commerce is rapidly taking share from brick-and-mortar stores.

The stock started falling early in the year as a number of department-store chains reported weak holiday sales, a warning sign for the rest of the apparel retail industry.

The stock slipped again when the company posted its own fourth-quarter report in March, as CEO Richard Hayne issued a grave retail warning. Comparable sales increased in two of its three key concepts, Urban Outfitters and Free People, but fell by 3% at Anthropologie. Earnings per share dropped from $0.61 to $0.55, missing estimates by a penny, as gross margin compressed.

In the earnings call, Hayne warned that there was a retail bubble, much like the housing bubble of last decade, which would result in closing stores across the industry for the foreseeable future.

The stock dropped 3% on the news and continued to fall through March. In May, shares dropped 17% in the week leading up to and including its first-quarter earnings report. This time around, the company saw comps drop 3.1% at Urban Outfitters and 4.4% Anthropologie. Increased markdowns led to falling profits, as earnings per share dropped from $0.25 to $0.10.

Urban Outfitters is working to build out its direct-to-consumer channel , but the near-term outlook looks weak, as growth in that segment hasn't been fast enough for to counteract falling in-store sales.

Analysts and Hedge Funds Opinions

Urban Outfitters received a $17.00 price objective from Royal Bank Of Canada in a report released on Monday, July 17th. The brokerage currently has a “hold” rating on the apparel retailer’s stock. Royal Bank Of Canada’s target price points to a potential downside of 4.12% from the stock’s previous close.

Several other analysts have also recently commented on the company…..

  • Morgan Stanley restated an “equal weight” rating and issued a $17.00 price target (down previously from $19.00) on shares of Urban Outfitters in a report on Monday, June 12th.
  • MKM Partners reiterated a “sell” rating and set a $16.00 target price (down previously from $19.00) on shares of Urban Outfitters in a report on Monday, June 12th.
  • Citigroup Inc. reiterated a “neutral” rating and set a $20.00 target price (down previously from $23.00) on shares of Urban Outfitters in a report on Sunday, June 11th.
  • Finally, Wells Fargo & Company reiterated a “market perform” rating and set a $16.00 target price (down previously from $18.00) on shares of Urban Outfitters in a report on Friday, June 9th.

Four equities research analysts have rated the stock with a sell rating, twenty-one have assigned a hold rating and eight have assigned a buy rating to the stock. The company currently has a consensus rating of “Hold” and a consensus price target of $25.28.

As well, SeaBridge Investment Advisors LLC lowered its position in shares of Urban Outfitters by 1.9% during the second quarter. The institutional investor owned 268,089 shares of the apparel retailer’s stock after selling 5,054 shares during the period.

Summary

While Urban Outfitters' collection of brands makes it stronger than other flailing retail concepts like department stores, the stock is unlikely to bounce back this year. Still, at a P/E of 12 based on this year's expected earnings, the stock would offer value if sales turn around. For now, the retail sector's troubles are far from finished.

Urban Outfitters has a 50-day moving average of $18.41 and a 200 day moving average of $21.84. The company has a market capitalization of $2.05 billion, a P/E ratio of 10.35 and a beta of 0.66. Urban Outfitters has a 1-year low of $16.19 and a 1-year high of $40.80.


Option Trade - TJX Companies Inc. (The) (NYSE:TJX) PUTS

Monday, August 14, 2017

** OPTION TRADE: Buy the TJX SEPT 15 2017 67.500 PUT at approximately $1.10. Sell price is left to your own judgment.

Specialty retailer TJX Companies Inc. (The) (NYSE:TJX), an off-price apparel and home fashions retailer in the United States and across the world, is scheduled to report its second-quarter numbers before the market opens tomorrow, August 15. The consensus calls for earnings of $0.84 on sales of $8.32 billion. During the same period last year the company earned $0.84 on sales of $7.88 billion.

TJX has struggled over the last three months following a mixed first-quarter report back in May. The company posted Q1 earnings that were above the consensus, but sales were weaker than expected, and the stock has trended lower in response.

On average, analysts expect that TJX Companies, Inc. (The) will report full year sales of $8.32 billion for the current financial year, with estimates ranging from $35.36 billion to $36.09 billion. For the next financial year, analysts anticipate that the business will report sales of $37.32 billion per share, with estimates ranging from $36.69 billion to $37.81 billion.

TJX shares have fallen 5.4% on the year.

Influencing Factors

TJX Companies expects pre-tax margins to remain under pressure for the next few quarters due to an increase in employee payroll. The company announced a wage hike of all full- and part-time hourly U.S. store associates during the fourth-quarter fiscal 2016 conference call, which is expected to negatively impact fiscal 2018 earnings. Higher wages are expected to keep pre-tax margins under pressure for the next few quarters. In fact, it is expected to affect fiscal 2018 earnings by 2%. Further, the company expects incremental investments, additional supply chain costs and pension costs to dent margins in the coming quarters.

Margins of the company are also seen to be facing the crunches of rising product costs. TJX Companies, being an off-price retailer, cannot increase the price of its products, which leads to lower margins.

TJX remains exposed to unfavorable foreign currency translations owing to a considerable international presence. Currency headwinds dented sales by two percentage points during the first quarter of 2018. Unfavorable currency translations are expected to hurt results in the near term.

Although the company is well placed internationally, it does not have any presence in developing markets which deprives the company of benefits from high growth opportunities in developing nations.

Such aspects have been downward drastic on the company's share price performance. Over the past six months, shares of TJX Companies have declined 7.2%, comparing unfavorably with the Retail-Wholesale sector's growth of 12.9%.

Analysts and Hedge Funds Opinions

Royal Bank Of Canada reiterated an “outperform” rating and issued a $79.00 target price (down previously from $82.00) on shares of TJX Companies in a report on Wednesday, May 17th.

Several other analysts have also recently commented on the company…..

BidaskClub upgraded shares of TJX Companies from a “strong sell” rating to a “sell” rating in a research report on Wednesday, June 28th.

Credit Suisse Group restated a “hold” rating and set a $79.00 price target on shares of TJX Companies in a research report on Wednesday, May 17th.

Jefferies Group LLC set a $80.00 price objective on shares of TJX Companies and gave the company a “hold” rating in a research report on Tuesday, May 16th.

Finally, Zacks Investment Research lowered shares of TJX Companies from a “buy” rating to a “hold” rating in a research report on Wednesday, April 26th.

Four research analysts have rated the stock with a hold rating, fourteen have assigned a buy rating and one has issued a strong buy rating to the stock. The stock currently has an average rating of “Buy” and a consensus price target of $83.78.

Several institutional investors have recently made changes to their positions in the stock…..

Ipswich Investment Management Co. Inc. reduced its stake in TJX Companies by 17.8% during the second quarter. The firm owned 24,875 shares of the apparel and home fashions retailer’s stock after selling 5,395 shares during the period.

Also, Washington Trust Bank decreased its position in shares of TJX Companies by 0.9% during the second quarter. The firm owned 11,485 shares of the apparel and home fashions retailer’s stock after selling 101 shares during the period.

As well, Steinberg Global Asset Management lowered its position in TJX Companies by 0.2% during the first quarter. The institutional investor owned 16,599 shares of the apparel and home fashions retailer’s stock after selling 33 shares during the period.

In other TJX Companies news, EVP Kenneth Canestrari sold 4,000 shares of TJX Companies stock in a transaction that occurred on Thursday, June 1st. The stock was sold at an average price of $75.80, for a total value of $303,200.00.

Also, EVP Richard Sherr sold 1,179 shares of TJX Companies stock in a transaction that occurred on Wednesday, May 17th. The shares were sold at an average price of $75.58, for a total value of $89,108.82.

Summary

TJX Companies, Inc. has a 52 week low of $66.65 and a 52 week high of $83.64. The company has a 50 day moving average price of $70.05 and a 200-day moving average price of $74.95. The company has a market capitalization of $45.72 billion, a PE ratio of 20.18 and a beta of 0.77.


Option Trade - Wal-Mart Stores Inc. (NYSE:WMT) Calls

Monday, August 14, 2017

** OPTION TRADE: Buy the WMT SEPT 15 2017 82.500 CALL at approximately $1.15. Sell price is left to your own judgment.

Mega retailer Wal-Mart Stores Inc. (NYSE:WMT) is expected to report its second-quarter numbers on August 17. The company will post its quarterly numbers before the market open, with the consensus calling for earnings of $1.06 on sales of $122.72 billion. During the same period last year the company earned $1.07 on sales of $120.16 billion.

The street has a whisper number of $1.08 for the quarter, slightly higher than the consensus, suggesting analysts expect another set of strong numbers.

Wall Street has taken a very bullish stance on Wal-Mart over the last year, as the company’s investments in e-commerce and boosting employee morale have resulted in rising online sales, and improved customer satisfaction in its stores.

Overall earnings estimates have been revised higher since the company's last earnings release. Option traders are pricing in a 4.2% move on earnings and the stock has averaged a 4.0% move in recent quarters.

While Amazon (AMZN) has devastated a lot of retailers, Wal-Mart has managed to compete better than most, and if it can continue to boost its online sales the market will continue to push shares higher.

Last quarter the company topped estimates on both the top and bottom line, and earnings were up 2.0% year over year. The company’s recent investments are starting to pay off, and analysts expect to see the company grow earnings by 5.9% per annum over the next five years as e-commerce sales continue to improve.

The stock has appreciated 17.6% on the year.

The stock has held up better than most in the retail sector and is just below buying territory after breaking out early this month.

Influencing Factors

Wal-Mart has been busy buying up boutique e-commerce firms and is reportedly one of the companies in talks to buy subscription cosmetics service Birchbox.

Wal-Mart is fighting back by ramping up its e-commerce operations. It paid $3.3 billion to acquire Jet.com in 2016 and installed its founder and CEO Marc Lore as head of its e-commerce division. Since that time, Lore has gone on a buying spree, snapping up online retailers such as Bonobos in order to broaden Wal-Mart's online brand portfolio and infuse its executive team with experienced e-commerce talent.

Lore also spearheaded Wal-Mart's move to offer free shipping on orders over $35, which forced Amazon to lower its free-shipping threshold. And under Lore's tenure, Wal-Mart is aggressively courting online merchants in an attempt to weaken Amazon's network of third-party merchants while strengthening its own. So far, Wal-Mart's efforts appear to be working: Its e-commerce sales surged 63% in the first quarter.

And now, it has also lowered minimum orders necessary to qualify for free shipping on online purchases.

After a pullback in June the stock made a bottom both in terms of price and the momentum indicators and since then, it has rocketed higher. WMT looks strong and has a few options for support should a pullback ensue, so bulls are undoubtedly in control.

Another big pay-off is JD.com's ability to partner with Wal-Mart to exploit a Chinese online consumer market that's far bigger than the U.S. Wal-Mart entered China in 1996, and operates 433 store locations there, employing approximately 100,000 associates, according to the company's website. The alliance with JD.com began in June 2016, and resulted in Wal-Mart gaining a 5% stake in the Chinese company, per Wal-Mart's press initial press release. The concept was that that Wal-Mart would be able to tap JD.com's significant base of online customers and vast same-day delivery network, while JD.com's customers would gain access to a wide range of new and imported items from Wal-Mart and Sam's Club, according to Wal-Mart. Wal-Mart later increased its stake to about 12%.

That strategy has worked. JD.com is offering its customers over 1,700 of Wal-Mart's most popular items from its retail stores across China, CNBC reports. Winston Chen, the president of JD International, said that the deal has the prospect of allowing his company to sell "a tremendous number of quality products not previously widely available in China."

Meanwhile, Wal-Mart is stocking its stores with merchandise from JD.com, which allows that company to expand its fulfillment capabilities, with delivery times now "about 30 minutes," said Chen. China already is an important market for Wal-Mart, which generates about 33% of its non-U.S. sales revenue there.

Walmart also operates Sam’s Club, a chain of membership-only retail warehouse clubs located in 48 states in the U.S. and Puerto Rico. Sam’s Club contributes around 12% of the company’s total revenue.

Analysts and Hedge Funds Opinions

Wal-Mart was upgraded to overweight from equal-weight at Stephens on the belief that investments in things like lower prices; staff and e-commerce capabilities have created an in-store experience that should continue to have momentum.

Also, Zacks Investment Research raised shares of Wal-Mart Stores from a “hold” rating to a “buy” rating and set a $82.00 price objective for the company in a report on Thursday, July 13th.

Several other analysts have also recently commented on the company…..

Vetr upgraded shares of Wal-Mart Stores from a “hold” rating to a “buy” rating and set a $79.40 target price on the stock in a research note on Monday, May 15th.

BMO Capital Markets upgraded shares of Wal-Mart Stores from an “underperform” rating to a “market perform” rating and increased their target price for the stock from $63.00 to $80.00 in a research note on Friday, May 19th.

Finally, KeyCorp reiterated an “overweight” rating and issued a $90.00 target price on shares of Wal-Mart Stores in a research note on Wednesday, April 19th.

Four research analysts have rated the stock with a sell rating, seventeen have given a hold rating, fifteen have assigned a buy rating and one has given a strong buy rating to the stock. Wal-Mart Stores presently has a consensus rating of “Buy” and an average price target of $79.40.

As well, Affinity Investment Advisors LLC boosted its position in Wal-Mart Stores by 15.7% during the first quarter. The firm owned 24,869 shares of the retailer’s stock after buying an additional 3,372 shares during the period. Affinity Investment Advisors LLC’s holdings in Wal-Mart Stores were worth $1,793,000 at the end of the most recent quarter.

Summary

Wal-Mart has been on a tear of late. Shares have rallied basically all year – minus a pullback in June – and new highs were hit just this week.

Wal-Mart Stores, Inc. has a 12 month low of $65.28 and a 12 month high of $81.99. The company has a market cap of $242.37 billion, a price-to-earnings ratio of 18.26 and a beta of 0.29. The company’s 50 day moving average is $77.44 and its 200-day moving average is $74.15.


EXTRA OPTIONS TRADES

Add the following trades that appeared in the article “Earnings Predictions for the Week Beginning August 14, 2017.”

These trades will be included in the results.

Reporting Tuesday, August 15

Agilent Technologies Inc. (NYSE:A) -- Analysts expect $0.52 earnings per share, up 6.12 % or $0.03 from last year’s $0.49 per share. A’s profit will be $167.09 million for 28.16 P/E if the $0.52 EPS becomes a reality. Agilent Technologies Inc. has risen 25.96% since August 11, 2016 and is up-trending. It has outperformed the S&P500 by 9.26%.

Option trade to consider: Buy the A SEPT 15 2017 60.000 CALL at approximately $1.50.

Reporting Wednesday, August 16

NetApp Inc. (NASDAQ:NTAP) -- The consensus estimate is for adjusted EPS to rise 20% to 55 cents, on revenue of $1.32 billion, up 2%. NetApp is among the leading providers of data storage and management solutions. It's been challenged by intense competition among providers of flash-storage products, a transition to cloud computing, and the emergence of "hyper-converged infrastructure." Shares are nearing sell territory.

Option trade to consider: Buy the NTAP SEPT 15 2017 40.000 PUT at approximately $1.00.

Target Corporation (NYSE:TGT)

-- Analysts expect Q2 EPS of $1.21, down 2%, with revenue essentially flat at $16.22 billion. Last month, it offered a brighter Q2 profit outlook on better foot traffic, citing its attempts at modernization. Still, Amazon's plans to buy Whole Foods (WFM), potentially reshaping the way people buy groceries, seems likely to be on the minds of analysts during Target's earnings calls.

Option trade to consider: Buy the TGT Sept 15 2017 55.000 PUT at approximately $1.70.


A REMINDER

REFER TO LAST WEEK'S "CUT-TO-THE-CHASE RECOMMENDATIONS"

Option Trade - Dicks Sporting Goods Inc. (NYSE:DKS) Puts

Thursday, August 10, 2017

** OPTION TRADE: Buy the DKS SEPT 15 2017 35.000 PUT at approximately $1.50. Sell price is left to your own judgment.

Dicks Sporting Goods Inc. (NYSE:DKS), an omni-channel sporting goods retailer offering an assortment of sports equipment, apparel, footwear and accessories in its specialty retail stores in the eastern United States is expected to report earnings on Tuesday, August 15, 2017, before the market opens. The report will be for the fiscal Quarter ending Jul 2017. Based on 11 analysts' forecasts, the consensus EPS forecast for the quarter is $1.02. The reported EPS for the same quarter last year was $0.82.

Dick's shares are down nearly 33% for the year so far. The S&P 500 Index (SPX) is up 10.7% for 2017 to date.

Over the last couple of weeks, two analysts have decreased their EPS estimates for the current year while three have dropped their number for next year. The overall impact on Consensus Estimates isn’t overly dramatic but it’s still leaving a mark. The current year number has dropped from $3.71 to $3.67 while next year’s number is off from $4.08 to $3.97.

Dicks Sporting Goods is known as the biggest name in big box retail sporting goods with help from the recent bankruptcy and liquidation of Sports Authority this last year. After the closing of Sports Authority, Dicks Sporting Goods was left miles out ahead of any competitor and rolled out an ambitious expansion plan to secure the now up for grabs market share Sports Authority left behind. But even with the closure of arguably one of Dicks Sporting Goods biggest competitors, they are still struggling to meet the metric forecasts set by upper management. Therefore, management certainly needs a good shake-up.

Dicks Sporting Goods opened the fiscal year with a projected first quarter growth of 3 to 4% but was only able to reach 2.4%. After these numbers were announced DKS stock fell roughly 18% in the month of May alone.

However, the company is still moving forward with its expansion plans to grab market share. DKS plans to add 43 new stores in 2017 along with 8 Golf Galaxy and 8 Field and Stream stores, some of which have already opened in the first quarter. Even after the shortfall and aftermath of the first quarter fall out DKS plans to open 13 new stores in the second quarter. Continuing expansion is key to growth and development, but management seems to be spreading funds too thin.

Analysts and Hedge Funds Opinions

Dick's Sporting Goods Inc. was downgraded to peer perform at Wolfe Research recently based on concerns about the shift to e-commerce from bricks-and-mortar retail. "Given the challenging reads through the first half of 2017, we believe any share gain potential will largely be eroded away by current oversupply, with too many goods chasing too little demand," analysts led by Adrienne Yih wrote. There's also "limited evidence" that Dick's is snapping up market share from competitors that are leaving the sector, the note said. "We believe Dick's is susceptible to severe deleverage and leaves us skeptical of further store openings beyond the current outlined plans," the note said, with Yih adding that Dick's is "sacrificing gross margin for comp" in an effort to price competitively.

Also, BidaskClub lowered Dick's Sporting Goods Inc to Strong Sell on August 07, 2017,

Summary

With the current valuation of DSG stock and the amount of uncertainty due to the competitive nature of the retail industry poses a great risk. With many other stocks such as Foot Locker (NYSE: FL) that pose to be a better buy after DKS not reaching there projected growth. Comparing DKS earnings per share to Foot Locker's earnings per share, DKS does not justify the premium that need to be paid to buy its stock as it continues to drop.

Dick’s Sporting Goods has a market cap of $4.19 billion, a PE ratio of 14.42 and a beta of 0.47. Dick’s Sporting Goods has a 12 month low of $34.55 and a 12 month high of $62.88. The firm has a 50 day moving average price of $38.36 and a 200-day moving average price of $45.85.






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