Analysts Say This Is the Athletic Retail Stock to Buy Now

Hibbett Sports is landing in Wall Street’s good graces at the start of 2018.

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 Sports store
A Hibbett Sports storefront.
CREDIT: Rex Shutterstock

“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.

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