Dick's Sporting Goods (DKS): Raising Estimates Ahead of Earnings - Cowen

Cowen analyst, John Kernan, reiterated his Outperform rating on shares of Dick's Sporting Goods (NYSE: DKS) ahead of earnings on 5/16 following Friday's Q4 non-GAAP earnings restatement, where non-cash SG&A costs were revised higher in Q4:16. The analyst thinks expectations are low for Non-GAAP EBITDA to achieve guidance for FY18,

The estimate increase is more to bring his model in line with consensus rather than project upside. The Q1 EPS forecast goes to $0.54 from $0.50, in-line with consensus and management's guidance of $0.50-$0.55. The analyst believes scale and improving execution could position DKS for share gains within its sector.

Embedded expectations include:
1) top-line growth of +10.8% from +10.4%, including SSS of +3%, in-line with +3-4% guidance but below +3.5% consensus
2) gross margin up +10bps vs. -5bps prior
3) 10bps of SG&A deleverage vs. 25bps prior, including expected higher pre-opening expense, driving a 5.3% oper. margin vs. 5% prior and 5.2% consensus.

No change to the price target of $55.

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 $48.06 yesterday.

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