Dick's (DKS) Should Be Owned For 2017; Sterne Agee CRT Upgrades to Buy

Sterne Agee CRT upgraded Dick's Sporting Goods (NYSE: DKS) from Neutral to Buy with a price target of $62. Analyst Sam Poser thinks near-term weakness in comps and price offers an attractive entry. Poser is also positive on efforts to take its e-commerce business in house.

"It's time to start picking up some DKS stock. In 2017, the e-commerce platform will be brought fully in house, and the EBIT payoff due to the pure margin accretion and the ending of the e-commerce build out spend, will result in a increase in earnings from 2016 to 2017 of at least 20%. The ecommerce business continues to grow at over 25% and should be over 10% of total sale this year, and in the range of 15% of sales by 2017. There may be some near-term noise, but share repurchases are likely to offset much EPS volatility. DKS is one of 2 best-in-class retailers in sporting goods, has growth ahead, and is moving away from lower margin businesses," said Poser.

"Upgrading to Buy from Neutral. Near-term weakness in SSS and stock price provides an entry point for a strong 2017 story: We understand the street's disappointment with the DKS's SSS miss, but believe the bottom for golf & firearms are in sight. More important, we believe investors should own this name for 2017, when the company takes its e-commerce business in house," added the analyst.

For an analyst ratings summary and ratings history on Dick's Sporting Goods click here. For more ratings news on Dick's Sporting Goods click here.

Shares of Dick's Sporting Goods closed at $56.29 yesterday.

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