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Academy Sports + Outdoors (NASDAQ:ASO) was started with an Outperform rating and $80 per share price target by Baird analysts on Wednesday.
The analysts described the company as a “leading sporting goods/outdoor recreation retailer, with a broad/diversified assortment, value-oriented pricing strategy, best-in-sector store productivity, and significant unit growth runway.”
“While some market participants still believe/fear ASO is materially ‘over-earning’, several structural/self-help business model improvements implemented pre-pandemic have created a strong foundation for continued profitable growth,” they wrote.
The analysts added that the sporting goods and the outdoor sector is large and fragmented, but ASO can grow its 5% share as it has a “broad/diversified assortment and value-oriented pricing strategy.” In addition, they stated structural business model improvements by ASO have created a strong foundation for future growth.
“The stock has been a homerun since the October 2020 IPO, but with ~LDD% EBIT margins sustainable and footage growth accelerating, shares simply look too inexpensive at ~9x FY23E GAAP EPS,” the analysts concluded.
