Today’s Bear of the Day is another one of those retail victims. Although here the story is a little different. This isn’t a mall stock that’s getting clobbered by Amazon. Rather, this is a stock which had a great opportunity after a major competitor went under and simply failed to capitalize.
I’m talking about Zacks Rank #5 (Strong Sell) Dick’s Sporting Goods (DKS). Dick's Sporting Goods, Inc. operates as a sporting goods retailer primarily in the eastern United States. It provides hardlines, including sporting goods equipment, fitness equipment, golf equipment, and hunting and fishing gear products; apparel; and footwear products and accessories. The company also owns and operates Golf Galaxy, Field & Stream and other specialty concept stores; and e-commerce Websites, as well as Dick's Team Sports HQ, a youth sports digital platform that offers free league management services, mobile apps for scheduling, communications and live scorekeeping, custom uniforms and fan wear, and access to donations and sponsorships.
After rival Sport’s Authority closed their doors, Dick’s looked to be the company that would benefit the most. However, in the wake of these events analysts still remain unimpressed. Over the last week, two analysts have decreased their EPS estimates for the current year while three have dropped their number for next year. The overall impact on our Zacks Consensus Estimate 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.
Shares of DKS have been under pressure since November of last year. That should really make investors take a step back as the rest of the market was pretty much on fire following the election. Dick’s has come down from over $60 in November to the mid-$30s where it trades at today. The 50-day moving average is well above the current price at $39.35, confirming the intermediate-term bearish trend for the stock. After making new lows a few days ago, it’s unclear where the next level of support may lie.
The miscellaneous retail industry ranks in the Bottom 23% of our Zacks Industry Rank. Investors looking for other ideas within the same industry can check out Zacks Rank #1 (Strong Buy) Build-A-Bear Workshop (BBW) or Zacks Rank #2 (Buy) Five Below (FIVE).
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