What Happened?
Shares of sporting goods retailer Academy Sports & Outdoor (NASDAQ: ASO) jumped 4.2% in the afternoon session after Barclays initiated coverage on the stock with a neutral 'Equal-Weight' rating. The bank set a price target of $51 for the sporting goods retailer. In its report, Barclays highlighted several positive factors, including a significant regional-to-national expansion opportunity with plans for about 160 new stores over the next four years. The firm also pointed to Academy's strong private label portfolio, which accounts for 23% of total sales, and favorable long-term trends in the sporting goods industry. However, the neutral rating also reflects certain risks, such as inventory growing faster than sales, challenges in elevating its footwear brand mix, and significant national competition, which contributed to a decline in the share price during the previous session. Today’s upward move suggests investors are focusing on the long-term growth potential outlined in the report.
After the initial pop the shares cooled down to $52.42, up 4.8% from previous close.
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What Is The Market Telling Us
Academy Sports’s shares are quite volatile and have had 18 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago when the stock dropped 3.2% on the news that Barclays initiated coverage on the company with a neutral 'Equal-Weight' rating and a $51 price target. The bank pointed to several risks that balanced the company's expansion opportunities. Concerns included inventory growing faster than sales, challenges in elevating its footwear brand mix, and significant national competition. The research firm also noted that broader economic and potential tariff uncertainty affected the company's outlook. This initiation came after Academy Sports reported second-quarter earnings that fell short of analyst forecasts and after other firms, like Citigroup, downgraded the stock.
Academy Sports is down 7.3% since the beginning of the year, and at $52.42 per share, it is trading 14.3% below its 52-week high of $61.17 from December 2024. Investors who bought $1,000 worth of Academy Sports’s shares 5 years ago would now be looking at an investment worth $4,035.
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