NEW YORK (AP) -- A BMO Capital Markets analyst lowered his rating Dick's Sporting Goods Inc. Wednesday, citing the stock's high valuation.
The Pittsburgh-based retailer on Tuesday reported that its net income rose 13 percent in the first three months of the year, reflecting higher sales and lower expenses.
Analyst Wayne Hood noted shares of the sporting goods retailer are up about 17 percent since March, compared with 7 percent for the S&P 500. He lowered his rating to "Market Perform" from "Outperform."
Although sales at established stores improved in the first quarter, Hood said more promotions will likely be needed to drive growth in certain segments, such as golf and fitness. He also said that the company's new store potential might need to be recalibrated, as a result of sales cannibalization from nearby stores and the growth of online sales.
Hood also said that free shipping could pressure results.
He kept his estimate for 2013 earnings per share at $2.84 but lowered his 2014 estimate by 5 cents to $3.30 per share. That compares with average analyst estimates of $2.86 per share for 2013 and $3.31 for 2014, according to FactSet.
Hood also kept a $57 price target on the stock.
Shares of Dick's Sporting Goods Inc. slipped 82 cents, to $51.93 in afternoon trading.