The Birmingham, Ala.-based retailer — which experienced its share of earnings hits and misses last year — on Sunday received a stark upgrade, from hold to buy, from Canaccord Genuity Inc. analyst Camilo Lyon.
Citing “significant” tax reform benefits and potential for incremental buybacks, a inventory position that could result in improving margin trends, e-commerce gains from its new digital platform and a better product pipeline, Lyon raised his price target for the stock to $30, from $17.
“Also, an all-SEC national championship football game doesn’t hurt with 18 percent of the store base in Alabama and Georgia,” he added.
Lyon’s bullish note is in sync with a similar read from Susquehanna Financial Group LLLP analyst Sam Poser on Tuesday in which he also suggested that investors snap up Hibbett shares.
“Hibbett is the ‘sleeper’ within our coverage universe,” Poser wrote. “We continue to believe the company is misunderstood by investors. Those who realize that Hibbett is a small market athletic specialty retailer and not a sporting goods retailer will be rewarded.”
Although Hibbett’s stock — and others in the sporting goods and athletic space — felt the pressures this week of a negative pre-announcement from Big 5 Sporting Goods, Lyon on Tuesday doubled down on his upbeat comments regarding Hibbett, noting that investors should buy the shares on weakness.
“We think the 7 percent decline in [Hibbett’s stock on Tuesday] is an unwarranted overreaction and presents an attractive buying opportunity,” Lyon noted.
When Hibbett reported Q3 results in November, it posted profits of $7.6 million, or 37 cents per diluted share, significantly besting forecasts for diluted EPS of 22 cents. Sales remained roughly flat at $237.8 million. The firm lifted its full-year EPS guidance to $1.42 to $1.50, from $1.25 to $1.35 previously.