Loop Capital started coverage on Academy Sports And Outdoors ( NASDAQ: ASO ) with a Buy rating.
Analyst Anthony Chukumba and team believe that ASO's unique business model, value price focus, and localized merchandising are driving industry-leading financial metrics.
The bullish view on the sporting goods retailer is that new store openings and margin upside could lead to strong free cash flow generation, which could then boost buybacks/dividends activity.
"We think Academy's recent resumption of new store openings could result in up to $2 billion of incremental annual revenue. We believe Academy has plentiful remaining margin expansion opportunities, and are encouraged by the company's strong free cash flow, which is consistently returned to its shareholders through stock purchases and a recently enacted quarterly cash dividend."
Loop Capital set a price target on ASO of $60, which is 7.6X the FY23 EPS estimate.
Shares of ASO rose 1.39% in Friday morning trading to $48.95.
The Seeking Alpha Quant Rating on ASO is Strong Buy and the quant score is the very highest of all specialty store stocks.
For further details see:
Academy Sports And Outdoors gains after Loop Capital pitches bull case