On Wednesday, Truist Securities adjusted its outlook on Academy Sports & Outdoors Inc. (NASDAQ:ASO), reducing the price target to $60 from the previous $73 while sustaining a Buy rating on the shares. This change follows an intraday decline of approximately 4% for the company's stock, triggered by a first-quarter earnings miss.
The analyst expressed concerns that achieving the full-year guidance would require a significant improvement in the second half of the year, which may not align with investor confidence due to recent macroeconomic pressures and performance shortfalls in the fourth quarter of 2023 and the first quarter of 2024.
Despite the recent challenges, the analyst believes that the downside for Academy Sports & Outdoors is limited, considering the stock is trading near historical low valuations. The firm anticipates that the company's performance will pick up, albeit at a slower rate than initially expected, when compared to the softer benchmarks of previous periods.
The report also highlights the company's long-term growth prospects, citing key investment initiatives such as the opening of new stores, enhancements to omnichannel platforms, customer data management, and improvements in supply chain infrastructure. These strategic moves are seen as potential catalysts for durable growth for Academy Sports & Outdoors.
The analyst remains positive on the stock, encouraging investors to continue buying despite the adjusted price target. The revised target of $60 reflects a new valuation based on the updated earnings outlook and the aforementioned factors that could drive the company's growth in the future.
In other recent news, Academy Sports & Outdoors has experienced a series of adjustments in its stock outlook. Baird has lowered its share price target from $80 to $68, citing a softer sales outlook and weaker gross margin. Meanwhile, BofA Securities downgraded the company's stock from Buy to Neutral and reduced the price target to $63, following disappointing first-quarter earnings. TD Cowen also revised its price target from $82 to $58 due to anticipated sales challenges, while maintaining a Buy rating.
Evercore ISI lowered its price target from $70 to $60, despite reaffirming an Outperform rating on the company. This followed a decrease in the company's first-quarter comparable sales by 6%, although initiatives are expected to help sales rebound in the second half of the year. UBS also adjusted its stance, downgrading the stock from Buy to Neutral and reducing the price target to $58 due to concerns about the company's financial guidance for fiscal year 2024.
Despite these adjustments, analysts from various firms, including Truist Securities, Jefferies, and B.Riley, continue to adjust their outlook on Academy Sports. Academy Sports also announced a partnership with DoorDash (NASDAQ:DASH), offering on-demand delivery services from its 285 stores across 19 states. These are the recent developments involving Academy Sports & Outdoors.
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