ASO - Academy Sports started at Buy as Baird applauds pricing strategy

2023-03-22 13:35:06 ET

Academy Sports and Outdoors ( NASDAQ: ASO ) was initiated at Buy on Wednesday as Baird eyes upside from the retailer’s appeal to value-oriented consumers.

The firm’s analysts called the retailer a solid pick based upon “best-in-sector store productivity and significant unit growth runway” as well as a diversified product base. The chain should also benefit from consumers focusing more tightly on spending and shifting away from higher priced chains.

“While some market participants still believe/fear ASO is materially ‘over-earning,’ several structural/self-help business model improvements implemented pre-pandemic have created a strong foundation for continued profitable growth,” the team said.

The analysts said the stock has “been a homerun since the October 2020 IPO” and should continue to see upside given a still-modest valuation. Per the analysis, “shares simply look too inexpensive” at present not to recommend.

An $80 price target was assigned to the stock alongside the Buy initiation. Shares rose modestly in afternoon trading and have surged over 70% in the past year.

Read more on the Katy, Texas-based company’s latest earnings results .

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