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Hibbett Sports Shares Up 50%, Buckingham Analyst Says It Won't Last

Brett Hershman

Despite a disastrous year for the sporting goods industry, Hibbett Sports, Inc. (NASDAQ: HIBB) shares have managed to run up nearly 50 percent in November. It may be time to sprint off with the recent gains, according to one research firm. 

The Analyst

Eric Tracy of Buckingham Research downgraded Hibbett Sports to Underperform and raised his price target from $9 to $13.

The Thesis

Hibbett Sports' recent gains are due to the company’s better-than-market-fears results and a subsequent squeeze in shares, Tracy said. (See Tracy's track record here.) 

While shares recovered nearly 50 percent in November, Hibbett Sports is still down 50 percent, the analyst said. 

Hibbett Sports is utilizing its new digital platform as a heavy liquidation vehicle, Tracy said. The company’s e-commerce success is not sustainable and is muting underlying comp challenges over the next two to three quarters, he said. 

“We believe structural headwinds remain," Tracy said in a Tuesday note. 

“Hibbett is an ultimate share donor in a consolidating sporting goods channel." 

Hibbett Sports sales are heavily skewed toward Nike Inc (NYSE: NKE) products, making up an estimated 65-70 percent of sales. Given the uncertainty over whether Hibbett Sports will be able to transform itself into the type of 'differentiated retailer’ that Nike and the other major sportswear companies are seeking, Tracy advises staying on the sidelines.

Price Action

Hibbett Sports ended Tuesday down 4.37 percent at $18.60. 

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Photo from Wikipedia. 

Latest Ratings for HIBB

Date Firm Action From To
Nov 2017 Buckingham Downgrades Neutral Underperform
Nov 2017 Bank of America Maintains Underperform
Nov 2017 BMO Capital Maintains Market Perform

View More Analyst Ratings for HIBB
View the Latest Analyst Ratings

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