Dick’s Sporting downgraded to Reduce from Buy at Gordon Haskett

Gordon Haskett downgraded Dick’s Sporting (DKS) to Reduce from Buy with a $170 price target after the company announced it is acquiring Foot Locker (FL) for $24 per share, based on concerns about the added operational and executional risks from the acquisition. While Dick’s “provided a compelling rationale for the deal,” the firm still questions the added operational complexity of adding a global footwear business with small-format, mall-based stores that is still in turnaround, while its own U.S.-based big box stores are gaining market share and executing well, the analyst tells investors. The firm questions its decision to “potentially disrupt the strong momentum in its core business by adding an underperforming asset that will take time and capital to turn around,” the analyst added.