On Friday, Telsey Advisory Group maintained its Market Perform rating on Hibbett Sports (NASDAQ:HIBB) shares with a price target of $87.50. This follows the announcement on Thursday that JD (NASDAQ:JD) Sports had finalized the acquisition of Hibbett Sports at the price of $87.50 per share. Consequently, Hibbett's stock has been withdrawn from trading on the NASDAQ.
The acquisition by JD Sports, a company not rated by Telsey, marks a significant change in Hibbett's corporate structure. Despite this transition, Mike Longo will continue to lead the company as CEO and President. Additionally, Jared Briskin, previously the Executive Vice President of Merchandising for Hibbett, has been appointed as the new Chief Operating Officer.
Telsey's analyst noted that with the completion of the acquisition, previous projections, the Market Perform rating, and the price target of $87.50 for Hibbett Sports are now obsolete and should no longer be considered relevant by investors or market watchers.
The acquisition deal, which valued each Hibbett share at $87.50, effectively concludes the independent trading of Hibbett's stock. The finalization of this transaction signifies the end of Hibbett as a standalone entity in the public market.
In light of these developments, stakeholders and investors are advised to update their records and investment strategies as Hibbett Sports begins its new chapter under the ownership and operational structure of JD Sports.
In other recent news, Hibbett Sports reported a dip in Q1 sales while surpassing earnings estimates. The company posted quarterly sales of $447 million, down 1.8% from the previous year, and a comparable store sales decrease of 5.8%. Despite this, Hibbett Sports saw its gross margin expand to 35.8%, driven by a reduction in promotions and cleaner inventory levels. The company's earnings per share (EPS) came in at $2.67, slightly exceeding the FactSet consensus.
These are recent developments in the company's financial performance and strategic initiatives.
InvestingPro Insights
In the wake of the acquisition of Hibbett Sports by JD Sports, it's pertinent to look at the recent financial performance and market sentiment surrounding Hibbett. According to InvestingPro data, Hibbett's market capitalization stood at approximately $1.05 billion, reflecting the size of the company just before the acquisition. The P/E ratio, a metric used to determine the relative value of a company's shares, was at 10.64 on a trailing twelve-month basis as of Q1 2023. This ratio, slightly adjusted to 10.27, indicates the earnings investors receive for each dollar invested in Hibbett's stock, suggesting a potentially undervalued stock when compared to the industry average.
Two notable InvestingPro Tips for Hibbett Sports include a high shareholder yield and the fact that the stock price has experienced a large uptick over the last six months, rising by 28.61%. Additionally, analysts predict the company will be profitable this year, which, despite the acquisition, remains an essential consideration for stakeholders tracking the performance of their investment in JD Sports' portfolio.
Investors interested in gaining more insights can find additional InvestingPro Tips for Hibbett Sports, which could provide further clarity on the company's financial health and market position. For instance, the stock's low price volatility, coupled with a high return over the last year of 102.53%, might have made it an attractive acquisition target for JD Sports.
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