On Friday, Jefferies initiated coverage on Academy Sports & Outdoors Inc. (NASDAQ:ASO) stock, issuing a Buy rating and setting a price target of $85.00. The firm highlighted the company's current trading levels as a representation of 'undervalued growth.'
Jefferies forecasts Academy Sports' 2024 earnings per share (EPS) to be 5% above the consensus, suggesting that the market has not fully recognized the significant impact of the company's merchandising strategies.
The analyst from Jefferies noted that Academy Sports is trading at 9 times its projected 2024 EPS, which is considered a substantial discount when compared to the company's largest competitor. This is despite Academy Sports experiencing share gains and maintaining its unit growth.
Academy Sports & Outdoors has been recognized for its ability to gain market share and sustain unit growth, factors that contribute to the analyst's optimistic stance on the stock. The firm's analysis points to a mispricing in the market, presenting an opportunity for growth in the company's stock value.
The initiation of coverage by Jefferies with a Buy rating and a price target of $85.00 for Academy Sports & Outdoors reflects a bullish view on the company's future performance. The firm's position is based on its evaluation of the company's earnings potential and strategic initiatives relative to market expectations.
InvestingPro Insights
Academy Sports & Outdoors Inc. (NASDAQ:ASO) is currently navigating the market with a strong financial footing, as evidenced by recent InvestingPro data. With a market capitalization of $4.44 billion and a price-to-earnings (P/E) ratio of 8.69, the company displays value investment characteristics. The real-time data also shows a price-to-book ratio of 2.27, reinforcing the notion that the stock may be undervalued, as suggested by Jefferies.
InvestingPro Tips indicate that Academy Sports & Outdoors has liquid assets that exceed its short-term obligations, which is a positive sign for financial stability. Moreover, analysts are optimistic about the company's profitability, predicting it will remain profitable in the coming year and noting it has been profitable over the last twelve months. This aligns with Jefferies' view of the company's strong financial prospects.
For investors looking for further insights, there are additional InvestingPro Tips available, which can be explored for a deeper analysis of Academy Sports & Outdoors' financial health and market potential. To access these tips and make the most informed decisions, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro. The current analysis on InvestingPro includes 6 more tips that could provide a more comprehensive understanding of ASO's market position and future outlook.
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