Several industry analysts have raised price targets and earnings estimates for Dick’s Sporting Goods in recent days, as the retailer is expected to deliver second-quarter results ahead of estimates when it reports on Thursday, August 21, driven by healthy top-line growth. Regardless, many continue to have “hold” ratings on Dick’s SG due to concerns over the pending Foot Locker merger.

Among those raising price targets in the last two weeks were Citi Research, Telsey Advisory, Williams Trading, TD Cowen, Wells Fargo, and Loop Capital.

Shares of Dick’s Sporting Goods, Inc. (DKS) collapsed $30.56, or 14.6 percent, to $179.05 on May 15 after the retailer announced plans to acquire Foot Locker. Analysts cited concerns such as brand identity differences, integration risks, higher exposure to Nike, and the task of turning around the struggling Foot Locker business. Shares have since rebounded, closing Monday at $227.84, up $0.21.

For the second quarter, Dick’s is expected to report quarterly earnings of $4.29 per share, representing a 1.8 percent decline compared to the year-ago period, amid margin pressures. Analysts forecast average revenues of $3.6 billion, representing a 3.6 percent year-over-year increase.  Same-store sales are expected to be up 3.1 percent.

Placer.ai, a research firm that tracks consumer foot traffic at retail stores, malls, shopping centers, restaurants and other retail venues, reported on August 20 that traffic at Dick’s Sporting Goods stores was down 5.3 percent year-over-year (y/y) across all stores in the second quarter. Traffic at same-store locations was down 4.5 percent y/y for the Q2 period.

Telsey Advisory Group, in an August 22 note, kept its “Outperform” rating on DKS and hiked its price target to $255 from $220.

Analyst Joe Feldman also raised his EPS estimate on DKS for the second quarter by 7 cents to $4.30 per share while expecting a 3.5 percent same-store sales gain. In raising estimates, Feldman cited “solid results” this second quarter from several large sporting vendors, including “strong” North American growth for Adidas, Hoka and On as well as for Titleist-parent Acushnet. Feldman said the U.S. Census Bureau data report of a “modest” 1 percent year-over-year increase in sales for the sporting goods, hobby, and book category for the three months ended July was likely due to continued weakness at Big 5 Sporting Goods and declining sales at Nike and Under Armour as both realign product offerings. He also expects DKS earnings to benefit from less operating margin pressure than he initially expected due to sales leverage.

“Long-term, we remain positive on Dick’s and expect the standalone company to generate solid earnings growth in 2025, followed by accelerated growth in 2026, as the company continues to gain market share and strategically strengthen the business,” said Feldman.

Feldman remains “mixed” about the pending Foot Locker acquisition but believes Dick’s “should be able to unlock value from Foot Locker and the combined company should be an even more dominant sporting goods retailer.”

Other potential benefits include expanding the retailer’s reach both geographically and demographically. Feldman added, “Furthermore, although the sales and earnings growth trajectory may be lower in the medium term when combined with the softer business profile of Foot Locker, performance can still be strong overall.”

 Citi Research, in a note dated August 20, maintained its “Neutral” rating on DKS while slightly increasing its price target to $225 from $220.

Analyst Paul Lejuez expects DKS to beat consensus EPS targets in the second quarter, as he anticipates Q2 comps to rise 4 percent, surpassing consensus targets, and gross margins to exceed expectations. He expects the retailer’s margins this year to benefit from the growing, high-margin Gamechanger/DKS media network businesses, as well as leverage from stronger comps. He anticipates DKS will raise estimates for the year as it reports Q2 results.

Lejuez believes tariffs are less of a concern for DKS this year, partly due to the industry’s long lead times. He also said that his team’s conversations with vendors indicated that suppliers likely absorbed much of the initial tariff impact with the first round of tariffs. Although Lejuez believes tariffs will likely present a bigger margin headwind for Dick’s in 2026.

“The FL deal remains a big point of discussion,” added Lejuez. “If DKS can turn FL sales/margins around, and achieve the synergies laid out (or more), we see $4.00+ in accretion over time. However, FL’s exposure to a lower-income consumer and NKE dependence leave us cautious on the turnaround.”

Morgan Stanley, in an August 20 update, reiterated its “Overweight” rating on DKS at a $233 price target.

Simeon Gutman expects DKS to report a 4.5 percent comp gain in the second quarter “as the consumer environment has remained resilient overall during May through July, and DKS continues capturing market share thanks to higher on-trend allocations from key brand partners, comp lift from the expanding ‘House of Sport’ conversions/greenfields and rising footwear penetration.”

He suspects Nike’s inventory rationalization and product updates will be a key focus for investors.

Gutman expects DKS operating margin to come in slightly below analysts’ targets of 12.8 percent of revenue due to a particularly challenging gross margin comparison against the year-ago quarter and an uptick in SG&A dollar growth, resulting from investments in talent, technology, and its advertising business. He expects those cost pressures to moderate in the back half.

As a result of the margin pressure, Gutman expects Q2 EPS in the range of $4.15 to $4.25, short of analysts’ average targets. He still expects the operating margin guidance to remain unchanged. Gutman said, “We would not view the lack of positive revisions to margin guidance unfavorably, given current uncertainty around tariff pricing during 2H25e, DKS’s ongoing market share gains, and its positioning as a best-in-class operator within the sporting goods category.”

TD Cowen, in an August 18 note, reiterated its “Hold” rating on DKS while raising its price target to $231 from $205.

Analyst John Kernan expects DKS to earn $4.29 in the second quarter, in line with consensus, although the analyst noted that the retailer has beaten sell-side consensus EPS seven quarters in a row. He expects same-store sales to come in higher than analysts’ consensus, or up 4 percent year-over-year.

Kernan said TD Cowen’s field data showed traffic was “more mixed during the quarter for both in-store and online,” but he believes strength in the footwear category is helping drive healthy comp gains for Dick’s.

Kernan said TD Cowen’s “Hold” rating is based on unknown risks associated with the Foot Locker business. He wrote, “Our proprietary TD Cowen Consumer Tracker Survey suggests that DKS is gaining sneaker and sporting goods retail share preference. Improved allocations of product from Nike and Adidas have helped, along with premium footwear deck installation (90 percent store base penetration). Our conversations with management teams at Nike, Adidas, Yeti, On and Deckers (Hoka) have all been increasingly constructive regarding their relationships with Dick’s Sporting Goods, which we take as a sign Dick’s is scaling beyond its peers across sporting goods and taking market share.”

Williams Trading, in an August 21 note, reiterated its “Hold” rating on DKS shares while lifting the price target to $210 from $200.

Sam Poser raised his EPS estimate for the retailer’s second quarter to $4.27 per share from his previous $4.21 estimate due to better-than-expected results. He expects same-store sales to expand 3 percent in the quarter.  Excluding any impact from Foot Locker, Williams Trading is also raising its FY25 and FY26 same-store sales, revenue and EPS estimates.

In his first in-depth analysis of the pending Foot Locker merger, Poser said a merger would yield significant cost synergies and that Foot Locker would benefit from Dick’s strong digital capabilities.

However, any shift by Ed Stack, DKS executive chairman and chief merchant, to focus on fixing Foot Locker may “take away from the progress that is well underway at Dick’s.” He noted that while Dick’s has made notable progress in improving store layout, product assortments, omnichannel execution, and overall store productivity, engagement in most stores is only “adequate” and well below a of Scheel’s, which he considers “the north star of sporting goods retail.”

Other risks to the merger include DKS operating as a retailer focused on fashion lifestyle consumers, with smaller stores than Dick’s Sporting Goods, and many of these stores located in malls or urban street locations. He believes that “new leadership will be needed” for the Foot Locker business with many former Foot Locker executives exiting in recent years to Journey’s, Famous Footwear and Snipes.

Finally, Poser said that Dick’s Sporting Goods’ past experience with acquisitions and new concepts “have been challenging,” citing the recent pullback in the Public Lands’ outdoors concept and the slow improvement of the Golf Galaxy business post-2007 acquisition. He also noted that Foot Locker’s acquisition of WSS has underperformed.

Poser concluded on his “Hold” rating, “Despite our increased estimates, our concerns about the Foot Locker acquisition result in the lower-than-average multiple.”

Loop Capital on July 30 raised its price target to $215 from $180, although it kept its “Hold” rating on DKS shares.

In a note, analyst Anthony Chukumba said the price upgrade followed a recent call by his team with former Foot Locker marketing executive Simone Griffith to discuss Dick’s pending acquisition.

He wrote, “We left the call feeling considerably more positive about the deal, particularly given the fact Ms. Griffith unequivocally stated she would have advised Dick’s to acquire Foot Locker given her belief the resulting scale and vendor leverage far outweighs the integration risk. All that said, we are maintaining our Hold rating on Dick’s given current valuation levels and continue to prefer Academy Sports and Outdoors for investors seeking exposure to the sporting goods retailing space.”

Image courtesy Dick’s Sporting Goods