Friday, TD Cowen adjusted its outlook on Academy Sports & Outdoors Inc. (NASDAQ:ASO), reducing the share price target to $82 from the previous $86 while maintaining an Outperform rating on the stock. The firm's decision reflects a nuanced take on the company's future financial performance, with particular focus on same-store sales (SSS) growth and earnings before interest and taxes (EBIT) margin trends.
The analyst from TD Cowen expressed optimism about Academy Sports & Outdoors' guidance, suggesting it shows confidence in the company's ability to return to SSS growth and improve EBIT margin and dollar trends as SSS accelerates. The sectors of footwear and apparel were highlighted as areas with potential for significant improvement.
In response to the company's recent conference call, the analyst remarked on the positive strategy, tone, and opportunities discussed. These factors contributed to the firm's continued positive outlook on the stock despite the slight reduction in the price target.
The new price target of $82 is based on a valuation of 10 times the fiscal year 2025 estimated earnings per share (EPS) and 6 times the enterprise value to EBITDA (EV/EBITDA). This valuation approach underpins TD Cowen's analysis and the revised target price for Academy Sports & Outdoors shares.
The adjustment in the price target by TD Cowen comes as analysts continue to monitor the performance of retail companies, assessing their strategies and market opportunities. Academy Sports & Outdoors Inc. remains in focus as it aims to capitalize on growth opportunities in the coming fiscal periods.
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