NEW YORK, NY / ACCESSWIRE / August 30, 2018 / While Amazon lifted off the launching pad on Wednesday on a stellar price target from Morgan Stanley, shares of Dick’s Sporting Goods were falling on lackluster second quarter results, citing Under Armour for its sales miss.
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Amazon.com, Inc. shares closed up 3.38% yesterday and hit a new high of $1,998.69 on about 6.2 million shares traded. The e-commerce giant soared to the new high after getting its highest price target yet on Wall Street from a Morgan Stanley analyst. Analyst Brian Nowak raised his price target by 35% to $2,500 a share Wednesday. Previously the analyst had a price target of $1,850. "We have increasing confidence that Amazon's rapidly growing, increasingly large, high margin revenue streams (advertising, AWS, subscriptions) will drive higher profitability and continued upward estimate revisions," said Nowak. "The (price target) adjustment reflects Amazon's improving business mix, long-term potential earnings power than its previous three-part sum-of-the-parts price target calculation," Nowak also said. Traders were exited as the upgrade could mean Amazon may break the trillion-dollar market value barrier. "We're very happy with the results we're seeing, and the backlog that we see, and the new contracts and new customers and the expansion of existing customer business that we see," CFO Brian Olsavsky said previously.
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Dick's Sporting Goods, Inc. shares tanked in Wednesday's session and sent shares of Under Armour down with it after reporting disappointing quarterly results. Dick's Sporting Goods closed down 2.17% yesterday but saw losses as high as 10% after reporting second quarter results that revealed same-store sales falling 4 percent. Overall net sales of $2.18 billion also missed Wall Street estimates of $2.24 billion. According to CEO Edward W. Stack, Dick's experienced "continued significant declines" in Under Armour sales. "As expected, sales were impacted by the strategic decisions we made regarding the slow growth, low margin hunt and electronics businesses, which accounted for nearly half of our comp decline," said Stack in the company's earnings release. "In addition, we experienced continued significant declines in Under Armour sales as a result of their decision to expand distribution." The Company reported adjusted EPS at $1.20, better than the expected EPS of $1.06. The stock traded a little over 23 million shares compared to an average trading volume of just under 3 million shares.
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