Path To Steady Expansion: Oppenheimer's Positive Outlook On Academy Sports And Outdoors

Oppenheimer analyst Brian Nagel reiterated an Outperform rating on the shares of Academy Sports and Outdoors Inc (NASDAQ: ASO) with a price target of $85.

The analyst, through an analysis, discovered that 143, or 53%, of the 269 stores currently operated by Academy Sports and Outdoors are situated within 5 miles of a unit operated by Dick’s Sporting Goods Inc DKS.

ASO is focused upon expanding further into existing markets and opening new stores in new geographies, said the analyst.

According to the analyst, successful new unit expansion represents a key intermediate- to longer-term expansion driver for ASO.

Better brand alignment, partnerships, and consumer knowledge allows ASO to more effectively localize product assortments, particularly in newer operating geographies, which the analyst thinks is the key to ASO’s expansion strategy.

Also, according to the analyst, the company represents an increasingly omnichannel-enabled operator, focused more intently on the outdoor category and serving more mass-market-oriented consumers.

Under the guidance of new senior leadership, ASO improved operational disciplines and set a path for better store productivity and a return to steady unit expansion in existing and new markets, said the analyst.

The analyst is positive that for the next several quarters, structural improvements within the company’s unique business model should turn clearer and encourage investors to award shares a multiple at least consistent with those afforded equities of other, leading operators within consumer and retail.

Price Action: ASO shares are trading higher by 1.35% at $53.87 on the last check Friday.