Dick's Sporting Goods, Equity Valuation and Analysis Essay Example
Table of Contents Executive Summary 2 Company Overview 2 Economic Analysis GDP Growth 3 Inflation 3 Interest Rates 3 Housing 5 Consumer Spending 5 Sovereign Debt 6 Unemployment 6 US Dollar 7 Impact of Sporting Goods Stores Industry 7 Industry Analysis 8 Porter’s 5 Forces 8 Big Four Analysis 11 Industry Life Cycle 13 Dick’s Sporting Goods Analysis Review of Annual Report 16 Company SWOT Analysis 18 Trend Ratio Analysis 20 Cross Sectional Ratio Analysis 22 Analyst Analysis/Estimates 24 DuPont Ratio Analysis 25 Valuation P/E Multiplier 26 Valuation FCF to Equity 27 Summary of Analyst Reports 28 Beta Analysis 29 Technical Analysis 29 Conclusions 31
Executive Summary
After analyzing Dick’s Sporting Goods and taking into account both positive and negative aspects associated with the stock, I am giving the stock a Moderate Buy Recommendation, with a target price of $46.50. The recommendation took into account DKS’s recent earnings report, improving financial health, growth estimates, and industry outlook.
In this report I will evaluate the current overall economic conditions and how they affect the Sporting Goods Stores industry and the Retail sector in general. The report then focuses on Dick’s Sporting Goods’ key measure of financial health, profitability, and growth compared to historical levels and competitors. A P/E Multiple analysis and a Free Cash Flow to Equity valuation approach was then used to derive an intrinsic value of the stock.
Company Overview
Dick’s Sporting Goods is the largest Sporting Goods Store in the United States, selling sports equipment, exercise and fitness equipment, apparel and footwear along with outdoor sports equipment and accessories. Dick’s was founded in 1948 and operates 455 stores in 42 states primarily in the eastern part of the United States.
Dick’s Sporting Goods controls 13.4% of the market share within the industry and has the largest market
Executive Summary
After analyzing Dick’s Sporting Goods and taking into account both positive and negative aspects associated with the stock, I am giving the stock a Moderate Buy Recommendation, with a target price of $46.50. The recommendation took into account DKS’s recent earnings report, improving financial health, growth estimates, and industry outlook.
In this report I will evaluate the current overall economic conditions and how they affect the Sporting Goods Stores industry and the Retail sector in general. The report then focuses on Dick’s Sporting Goods’ key measure of financial health, profitability, and growth compared to historical levels and competitors. A P/E Multiple analysis and a Free Cash Flow to Equity valuation approach was then used to derive an intrinsic value of the stock.
Company Overview
Dick’s Sporting Goods is the largest Sporting Goods Store in the United States, selling sports equipment, exercise and fitness equipment, apparel and footwear along with outdoor sports equipment and accessories. Dick’s was founded in 1948 and operates 455 stores in 42 states primarily in the eastern part of the United States.
Dick’s Sporting Goods controls 13.4% of the market share within the industry and has the largest market