BofA Securities analyst Robert F. Ohmes cut Dick’s Sporting Goods, Inc. (NYSE:DKS) price target to $225 (from $245) while reiterating a Neutral rating.

The price target change reflects the risk of more limited earnings upside this year as the analyst expects planned investment spending supporting the growth of House of Sport (+75-100 by 2027), Next Generation stores (+16 in 2024), and GameChanger (technology capabilities build-out) to weigh on occupancy and operating expenses.

The analyst cut the estimates for first-quarter adj. EPS to $2.85 (from $2.97) to reflect better SG&A pressures in the quarter, given brand campaigns, higher pre-opening and marketing expenses to support House of Sport openings, and continued shrink pressures on gross margin.

On the other hand, the analyst’s adjusted EPS estimate of $13.20 reflects modest SG&A leverage on cost management and business optimization actions completed in the fourth quarter.

Meanwhile, Ohmes sees impressive DKS House of Sport stores, all-time high-key brand partnerships, DKS vertical apparel brands (CALIA, VRST, DSG), and sourcing capabilities as tailwinds.

Also Read: Dick’s Sporting Goods To Gain From Diverse Assortment Of National Brands, Rollout Of New Store Concepts: Analyst

Price Action: DKS shares are down 1.62% at $203.78 at the last check Monday.

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