Dick’s Sporting Goods stock rallies after analyst upgrades, citing ‘overly pessimistic’ sentiment

Shares of Dick’s Sporting Goods Inc. hiked up 2.4% in premarket trading Thursday, after Oppenheimer analyst Brian Nagel turned bullish on the sporting goods and athleisure apparel retailer, saying he believes the company will keep capitalizing on “positive, post-pandemic shifts in consumer demand.” Nagel raised his rating to outperform, after being at perform since August 2020, and established a stock price target of $138, which implies about 26% upside from Wednesday’s closing price. The upgrade comes as Nagel said the “fundamental underpinnings” of athleisure and sporting goods are solid, if not strengthening, and sees investor sentiment toward the stocks as “generally overly pessimistic.” Nagel added that Nike Inc.’s recent warning that it would cut prices to clear inventory has soured sentiment toward the sector, but he said lower shipping costs and easing supply chain constraints are allowing product to “flow much more efficiently and cost effectively,” putting Nike and others in a much better position to deliver product to “still-healthy” demand. Dick’s stock has lost 5.1% year to date, while Nike shares have shed 46.9% and the Dow Jones Industrial Average has lost 16.3%.

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