On Wednesday, Loop Capital upheld a positive stance on Academy Sports & Outdoors Inc. (NASDAQ:ASO), maintaining a Buy rating and a price target of $77.00. The firm acknowledged that Academy's financial performance in the third quarter of fiscal 2024 fell short of expectations. However, the analysts found reasons for optimism in the retailer's comparable store sales growth observed during the initial two months of the quarter.
The firm highlighted the forthcoming expansion of Academy's Nike (NYSE:NKE) merchandise assortment as a key development. This move is anticipated to not only enhance the retailer's product offerings but also potentially attract other sought-after brands to partner with Academy, such as On and HOKA. The company maintains strong fundamentals with a healthy current ratio of 1.57 and consistent dividend growth of 22.2% over the last year.
Loop Capital further noted that with Academy's shares trading at less than 8 times their revised fiscal year 2025 diluted earnings per share (EPS) estimate, the stock appears to be "priced for imperfection." According to the firm, this valuation suggests that the potential for stock appreciation significantly outweighs the associated risks. This assessment underpins their reiterated Buy rating and $77 price target for Academy Sports & Outdoors Inc.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.