Dick’s Sporting downgraded to Neutral from Buy at Citi

Citi analyst Paul Lejuez downgraded Dick’s Sporting Goods to Neutral from Buy with a price target of $140, down from $143, ahead of the company’s Q4 results on March 7. The analyst expects an earnings beat, but anticipates weaker gross margin versus consensus. Margins are expected to be down in 2022, showing sales growth has come at a cost, the analyst tells investors in a research note. The firm expects near-term margin pressure to continue, driven by excess inventory in the marketplace, and for the company’s fiscal 2023 guidance "to reflect another year of sales/margin give back." With Dick’s facing difficult multi-year comparisons in 2023, it is tough to see how it can sustainably grow sales and earnings, the firm contends. Citi sees the stock’s risk/reward as more balanced at current levels.