Big 5 Sporting Goods a Big Hold - Analyst Blog
We are keeping our Hold rating and maintaining our estimates on
Big 5 Sporting Goods (
BGFV) ahead of its third quarter results. BGFV expects to earn $0.14-$0.20 per share and $0.60-$0.80 per share for full-year 2008.
Given the weak sales trends at Big 5's stores, it will be difficult for BGFV to meet its guidance. Despite the soft outlook, BGFV shares are trading at a reasonable valuation based on our below consensus estimates.
Longer term, Big 5 Sporting Goods' business model, store expansion plans, and diversified product offerings should position the company for solid growth when industry conditions finally improve. Our target price of $6 is about 9x our 2009 EPS estimate.
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