Dick's Sporting Goods Inc (DKS.N) shares could rise 23 percent within the next year if the largest publicly traded U.S. sporting goods retailer continues to boost profit at a mid-teens percentage rate, Barron's said in its February 25 edition.
The newspaper said Dick's and rival Foot Locker Inc (FL.N) have been taking market share from mom-and-pop stores and privately held Sports Authority, with Dick's differentiating itself by offering in-store boutiques organized by brand, and on-site fitness trainers and golf professionals.
Dick's recently operated 511 of its namesake stores in 44 U.S. states, as well as 81 Golf Galaxy stores in 30 states. The newspaper said it expects to operate 900 stores before reaching a saturation point.
The Coraopolis, Pennsylvania-based company's shares have fallen 10 percent from their 52-week high set in September, hurt in part by investor concern over lower gun and ammunition sales following the December 14 massacre at an elementary school in Newtown, Connecticut.
Dick's at that time announced a suspension of the sale of so-called modern sporting rifles at its stores.
But the newspaper said investor concerns seem misplaced, given that guns and ammunition in general account for only a mid-single-digit percentage of Dick's sales.
It also said some retailers including Wal-Mart Stores Inc (WMT.N) and Cabela's Inc (CAB.N) have seen a pickup in sales of guns and ammunition as some gun enthusiasts fear a crackdown on future sales.
Dick's shares closed Friday at $48.95 on the New York Stock Exchange, but the newspaper said they could reach $60 within 12 months if mid-teens earnings growth is achieved.
(Writing by Jonathan Stempel in New York; Editing by Dale Hudson)