On Monday, B.Riley adjusted its outlook on Academy Sports & Outdoors Inc. (NASDAQ: ASO), increasing the share price target from $65.00 to $72.00. The firm sustained its Buy rating for the company's stock. The move followed the company's fourth-quarter earnings report, which highlighted mixed results and some positive trends.
The analyst at B.Riley cited improved trends in the Outdoor segment and gross margin performance as reasons for optimism despite the negative comparable store sales.
In the context of the broader retail market, B.Riley noted that Academy Sports & Outdoors is trading at a discount compared to other retail growth stories. This valuation gap, especially when considering the company's potential for footprint expansion, was a key point in the firm's analysis.
The reassessment of the stock's price target comes after the shares experienced a "breather" following the earnings announcement. According to B.Riley, this has created a more attractive entry point for investors, particularly in light of the significant valuation difference between Academy Sports & Outdoors and its competitor, Dick's Sporting Goods (NYSE:DKS).
In summary, B.Riley's revised price target of $72.00 reflects a positive outlook on Academy Sports & Outdoors' growth potential and market position. The firm reiterates its Buy rating, signaling confidence in the company's prospects despite ongoing consumer pressures as it moves into 2024.
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